Oil is approaching $90 again and the stock markets are trading cautiously ahead of the key inflation data in the United States

The price of crude oil fell this Thursday despite ongoing tensions over the Strait of Hormuz, as market participants weighed signs of weaker global demand against persistent supply disruptions in the Middle East. The benchmark Brent crude, which serves as a reference for Chile, dropped 2.01%, settling at $87.19 per barrel, while the U.S.-based West Texas Intermediate (WTI) declined 2.31% to $81.36 per barrel, according to TradingView data. These declines came amid growing concerns that global demand for oil could fall more sharply than previously anticipated, even as supply constraints remain severe. The International Energy Agency (IEA) issued a warning on Wednesday, projecting a larger-than-expected decline in global oil demand for the year. The agency attributed this shift to renewed hostility and maritime disruptions, which have undermined efforts to increase world crude output. According to the IEA, global oil supply remained 6.3 million barrels per day below the level recorded in July of the previous year. This continued shortfall has kept prices volatile, with investors closely watching developments in the region. Meanwhile, deadly attacks on vessels in the Gulf of Oman and the Red Sea have heightened investor anxiety, while an oil spill near Oman continues to spread. The spill originated from a tanker that ran aground on June 30, carrying an estimated 800,000 barrels of Russian crude under international sanctions. The spill has begun affecting Omani shores, threatening wildlife such as humpback whales in the Arabian Sea and Socotra Cormorants. Reuters reported that the spill is contaminating a protected natural reserve, raising environmental concerns. Despite ongoing diplomatic efforts to fully reopen the Strait of Hormuz, the conflict, now entering its fifth month, remains a major disruption to regional energy flows. While some reports suggest progress in talks between Oman and Iran, these discussions have yet to result in meaningful easing of restrictions. Analysts warn that until the situation stabilizes, oil prices will continue to face downward pressure, potentially impacting broader financial markets. Liza Salinas, a senior business director at Liberty Finance-Life, noted that the uncertainty surrounding the Strait of Hormuz remains a key factor influencing oil prices. She warned that unless the crisis resolves, each fluctuation in oil prices could further strain local currencies, particularly the peso, should gold prices weaken. “While there are signals of diplomatic engagement, the lack of tangible progress means the risk of continued volatility persists,” she said. In contrast, other reports indicate a different trend. On Wednesday, the Brent crude extended its recovery, reaching nearly $90 per barrel, marking its sixth consecutive session of gains. The WTI also rose slightly, climbing to $83.89 per barrel. These increases followed new episodes of tension in maritime trade and a hardening of positions between Washington and Tehran. According to AFP, the two main crude contracts saw a weekly gain of around 14%, driven by fears of prolonged blockades and rising geopolitical risks. Iran’s top security official, Mohsen Rezaei, stated that the strait would remain closed until the United States accepts Iranian conditions for ending the dispute. Meanwhile, President Donald Trump has expressed openness to finding a resolution, though no substantial progress has been made. Recent incidents, including a U.S. helicopter firing missiles at a Panamanian freighter attempting to bypass sanctions, have further escalated tensions. Analysts like Fawad Razaqzada of Forex.com emphasized that the current surge in oil prices is largely due to the continued closure of the Strait of Hormuz and the absence of progress between the U.S. and Iran. Although talks between Oman and Iran offered some relief, they have not led to a definitive breakthrough. “These discussions provide a positive signal, but they do not resolve the underlying issues driving the price rise,” he said. Schroders analysts echoed similar sentiments, noting that the reopening of the strait to full capacity is unlikely in the near term. Dorian Carrell, head of income at the firm, suggested that the current pricing environment sets a floor for oil prices and sustains inflationary pressures in both short and medium-term markets. As the situation evolves, the focus remains on whether the ongoing standoff can be resolved before the release of key economic data, including the U.S. inflation figures for July, which could influence central bank policy decisions.