Brent Crude Holds Above $87 as Geopolitical Supply Risks Offset Weak Demand Forecasts

Mumbai, Aug 15: Global crude oil markets concluded the trading week on a mixed note, with prices exhibiting sharp volatility as the protracted US-Iran standoff over the Strait of Hormuz continued to underpin supply concerns, while weakening demand forecasts from major energy agencies exerted downward pressure. Brent crude futures for October delivery traded at $86.77 per barrel on Friday, down 0.34%, while US West Texas Intermediate (WTI) crude gained 0.42% to $80.92 per barrel. For the week, both benchmarks remained on track for weekly gains, with oil futures having risen more than 40% so far in 2026, fuelled by the US-Iran war that began in late February. The domestic market mirrored global trends, with MCX crude oil futures reflecting the broader volatility. 

Brent and WTI Weekly Performance: Six-Day Winning Streak Snaps on Thursday Rout 

Crude oil prices experienced a volatile week, with Brent advancing for six consecutive sessions through Wednesday before a sharp reversal on Thursday. Brent futures for October delivery rose 4.99% on 10 August to settle at $87.72, while WTI futures for September gained 4.98% to reach $82.16 per barrel. Earlier in the day on 10 August, Brent had traded at $84.42 and WTI at $78.83 in early trading before extending gains. By mid-week, Brent had pushed toward $89 per barrel and WTI above $83 as Strait of Hormuz talks stalled. 

Also Read: How to invest in crude oil

However, the rally came to an abrupt halt on 13 August, when Brent plunged 2.15% to settle at $87.07 per barrel, while WTI tumbled 2.4% to $81.25. The sharp decline ended Brent’s six-session winning streak and WTI’s five-session run of gains. On 14 August, prices showed a mixed recovery, with Brent slipping 0.08% to $87.00 and WTI easing 0.06% to $81.20. 

Strait of Hormuz Blockade: US Threatens Indefinite Naval Blockade as Ship Transits Collapse 

The primary driver of oil price volatility throughout the week remained the geopolitical standoff over the Strait of Hormuz, the critical shipping chokepoint through which a significant share of the world’s seaborne oil passes.  

The United States on Thursday signalled that it could maintain its naval blockade of Iran indefinitely and would intensify economic pressure on Tehran as ceasefire talks stalled. Iran’s Foreign Ministry has maintained that the strait will not reopen until the US lifts its naval blockade, while the US has asserted it maintains ”total control” over the waterway.  

The disruption has had a dramatic impact on shipping activity, with ship transits through the Strait of Hormuz falling to just eight vessels on one recent day, down from more than 130 before military action escalated in the region earlier in the year. Reports of attacks on vessels continued throughout the week, with Abu Dhabi National Oil Co. stating that two more of its ships were attacked late Thursday. Iran-backed Houthi militants also claimed they targeted Saudi Arabia’s Jazan refinery, following an earlier strike that delayed restart plans. 

OPEC and IEA Slash 2026 Demand Forecasts: Fourth Consecutive Cut by OPEC 

Despite persistent supply risks, oil prices faced significant headwinds from weakening demand projections released during the week. On 12 August, the Organisation of Petroleum Exporting Countries (OPEC) lowered its 2026 global oil demand growth forecast to 580,000 barrels per day, down from 780,000 in July, marking the fourth consecutive monthly cut. OPEC’s monthly report attributed the downgrade mainly to Asia, with China, India, and other Asian markets expected to consume less this year than previously assumed.  

The following day, the International Energy Agency (IEA) delivered an even more bearish assessment in its August monthly report, projecting that global oil demand would slump by 1.6 million barrels per day in 2026—a decline of 510,000 bpd from the July forecast, which had assumed the Strait of Hormuz oil flows would gradually rise.  

The renewed hostilities at the end of July and the deadlock in US-Iran talks prompted the IEA to project much larger demand destruction due to higher prices. The gap between the two organisations’ views remained wide, with OPEC continuing to see a smaller demand effect from the Iran war than the IEA. 

US Crude Inventories Post Largest Weekly Build Since January 2023: 17.4 Million Barrels 

Adding to the bearish sentiment was a surprise surge in US crude oil inventories. The Energy Information Administration (EIA) reported on Wednesday that US commercial crude oil inventories climbed by 17.4 million barrels to 424.4 million barrels for the week ending 7 August—the largest weekly increase since January 2023 and the highest level since 5 June. The build contrasted sharply with analyst expectations of a 1.4 million-barrel draw.  

The substantial inventory increase was predominantly driven by a 1.14 million bpd surge in crude oil imports week-on-week, while crude exports fell by 627,000 bpd. US crude exports plunged to 3.06 million bpd, the lowest level since November 2025. US net crude oil imports rose by 1.77 million barrels per day, reaching their highest level since June 2025. Crude imports from Canada climbed to their highest level since March 2025, and imports from Venezuela reached their highest since September 2024.  

The EIA also reported a 1-million-barrel drop in US gasoline inventories to 208.7 million barrels, while distillate inventories fell marginally by 10,000 barrels to 107.1 million barrels. 

Global Supply Shortfall: IEA Flags 1.8 Million Bpd Deficit This Quarter 

Despite the bearish demand forecasts and inventory build, the supply side of the equation remained tight. The International Energy Agency flagged a global supply shortfall of around 1.8 million barrels per day this quarter as the Strait of Hormuz disruption continued. The IEA forecast a deeper supply shortfall this quarter and sees the deficit in 2026 expanding to the widest in five years.  

The persistent supply disruption has kept oil prices elevated despite weakening demand prospects. Brent crude had fallen to about $69 per barrel at the start of July before rising sharply and reaching about $100 at the time of the South African Reserve Bank’s meeting on 23 July, on disruption risk around the Strait of Hormuz. The EIA expects Brent to average $86.81 a barrel across 2026 and expects significant Middle East supply disruption to persist into 2027.  

Money managers cut net long positions in NYMEX WTI by 7,257 lots to 101,050 lots, while net longs in ICE Brent fell by 20,361 lots to 164,722 lots, marking a second consecutive weekly decline. 

MCX Crude Futures Mirror Global Volatility as Rupee Weakness Adds Pressure 

The domestic crude oil market on the Multi Commodity Exchange of India mirrored the volatility in international benchmarks. While specific MCX closing prices for the week were not available in the search results, domestic crude futures typically track global price movements adjusted for the rupee-dollar exchange rate.  

The rupee’s movement against the dollar remained a key factor influencing domestic crude prices, with a weaker rupee making dollar-denominated imports more expensive for Indian buyers. The broader commodity market sentiment was also influenced by the US 10-year Treasury yield hovering near elevated levels and the dollar index reclaiming the 100 mark during the week, which typically exerts pressure on dollar-denominated commodities. 

Petrol and Diesel Prices Hold Steady: OMCs Shield Consumers from Volatility 

Despite the sharp volatility in global crude oil markets, retail petrol and diesel prices in India remained unchanged throughout the week.  

Oil marketing companies (OMCs) continued to shield consumers from the volatility in international oil prices, with retail fuel rates holding steady at levels last revised nearly three months ago, on 25 May. The practice of daily price revisions at 6 AM helps OMCs keep domestic fuel prices aligned with international crude oil prices and currency exchange rates. 

City-Wise Petrol Prices on 14 August: Hyderabad Costliest at ₹115.69, Chandigarh Cheapest at ₹98.10 

Petrol prices across major Indian cities on 14 August showed significant regional variation, primarily driven by differences in state and local taxes. Hyderabad remained the costliest city for petrol at ₹115.69 per litre, followed closely by Thiruvananthapuram at ₹115.49.  

Among metropolitan cities, Kolkata recorded petrol at ₹113.51 per litre, Mumbai at ₹111.21, Chennai at ₹107.77, and New Delhi at ₹102.12. Chandigarh continued to have the lowest petrol price among major cities at ₹98.10 per litre.  

Other cities and their petrol prices included Bengaluru at ₹110.93, Gurugram at ₹102.97, Noida at ₹101.96, Lucknow at ₹102.31, Jaipur at ₹112.69, Patna at ₹113.37, and Bhubaneswar at ₹108.49. 

City-Wise Diesel Prices on 14 August: Thiruvananthapuram Highest at ₹104.40, Chandigarh Lowest at ₹86.09 

Diesel prices also exhibited significant regional variation on 14 August. Thiruvananthapuram recorded the highest diesel price at ₹104.40 per litre, followed by Hyderabad at ₹103.82 and Bhubaneswar at ₹100.92. Among metropolitan cities, Kolkata recorded diesel at ₹99.82 per litre, Chennai at ₹99.55, Mumbai at ₹97.83, and New Delhi at ₹95.20.  

Chandigarh had the lowest diesel price at ₹86.09 per litre. Other cities and their diesel prices included Bengaluru at ₹99.56, Gurugram at ₹95.64, Noida at ₹95.44, Lucknow at ₹95.79, Jaipur at ₹97.78, and Patna at ₹99.36. CNG prices on 14 August stood at ₹83.09 per kg in New Delhi, ₹86 in Mumbai, and ₹91.70 in Gurugram and Noida. 

Weekly Price Movement: Petrol and Diesel Remain Unchanged Despite Crude Volatility 

Throughout the week from 10 August to 14 August, retail petrol and diesel prices remained unchanged across all major cities. On 11 August, Delhi petrol was at ₹102.12 and diesel at ₹95.20, Mumbai petrol at ₹111.18 and diesel at ₹97.83. By 12 August, Mumbai petrol had seen a marginal adjustment to ₹111.12 and diesel to ₹97.78, while Kolkata petrol stood at ₹113.43 and diesel at ₹99.78. On 13 August, prices remained steady with Delhi at ₹102.12 and ₹95.20, Kolkata at ₹113.51 and ₹99.82, Mumbai at ₹111.21 and ₹97.83, and Chennai at ₹107.78 and ₹99.56. The stability in domestic fuel prices, despite the sharp volatility in global crude markets, reflected the OMCs’ strategy of absorbing the impact of international price fluctuations. 

Weekly Crude Roundup: Geopolitical Premium vs Demand Destruction 

The week of 10-14 August 2026 encapsulated the fundamental tension that has defined oil markets throughout the year: a significant geopolitical risk premium driven by the Strait of Hormuz disruption versus weakening global demand fundamentals. The US threat of an indefinite naval blockade of Iran kept supply risks elevated, while OPEC’s fourth consecutive demand forecast cut and the IEA’s projection of an outright demand slump in 2026 weighed on prices.  

The EIA’s report of a massive 17.4 million-barrel inventory build added to the bearish narrative, though analysts characterised the build as an anomalous event driven by a slump in exports and a surge in imports. The resulting price action saw Brent oscillate between $87 and $89 per barrel, with WTI trading in the $80-$83 range. Domestic fuel prices remained insulated from the volatility, providing stability for Indian consumers. 

The week’s crude oil market was characterised by competing forces of geopolitical supply risks and weakening demand fundamentals. Brent held above $87 per barrel despite OPEC and IEA demand forecast cuts, supported by the US-Iran standoff over the Strait of Hormuz. The EIA’s 17.4 million-barrel inventory build and falling US exports added bearish pressure, though supply disruptions limited downside. Domestic petrol and diesel prices remained unchanged across cities, with OMCs absorbing global volatility. Hyderabad recorded the highest petrol at ₹115.69, while Chandigarh remained the cheapest at ₹98.10. The trajectory of crude prices remains contingent on developments in US-Iran negotiations and upcoming inventory reports. 

Source 

• https://ppac.gov.in/prices/international-prices-of-crude-oil 
• https://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm