Oil Prices Today, August 18, 2026: Crude Rises 0.5% To $91.3 Per Barrel As US-Iran Ceasefire Ends 

Mumbai, August 18: Oil prices extended their gains on Tuesday as hopes of a deal to end the US-Iran conflict faded, raising concerns over disruptions to global energy supplies. Brent crude climbed to its highest level since late July, while US West Texas Intermediate (WTI) crude also touched a multi-week high as investors assessed the risk of prolonged tensions in the Middle East. The expiry of a temporary ceasefire and uncertainty over the reopening of the Strait of Hormuz have added a fresh risk premium to crude prices. 

Brent Crude Rises Above $91 

Brent crude futures rose 0.5% to $91.3 a barrel, after touching their highest level since July 30 on Monday, while US West Texas Intermediate (WTI) crude gained 0.7% to $85.1 a barrel. WTI had earlier climbed to $85.37 on Monday, its highest level since July 31. 

The latest gains came after oil prices surged in the previous session, reflecting growing concerns that diplomatic efforts between Washington and Tehran may not produce an immediate breakthrough. The prospect of prolonged conflict has raised questions about the security of crude supplies from the region. 

US-Iran Ceasefire Expiry Raises Supply Concerns 

Both contracts advanced as the US-Iran ceasefire faded. Source: Oilprice.com 

Oil markets have been closely tracking developments between the US and Iran after Washington ruled out extending a temporary ceasefire agreement. A senior Iranian official told Reuters that Tehran would shift to a more offensive military posture as efforts to negotiate a permanent end to the conflict stalled.

The lack of progress towards peace talks has also reduced expectations of a quick restoration of normal energy flows through the Strait of Hormuz. The strategic waterway is critical to global oil trade, and any prolonged disruption could tighten supplies and push crude prices higher. 

Also Read: How To Invest In Crude Oil

Strait Of Hormuz In Focus 

The Strait of Hormuz has emerged as the biggest source of uncertainty for oil markets. Ship-tracking data from Kpler showed that only five commodity vessels crossed the strait on Saturday, while none were recorded on Sunday. That compares with 31 vessels during the previous weekend. 

The sharp decline in shipping traffic has heightened concerns that the conflict is already affecting the movement of energy supplies. Analysts have warned that the situation around the Strait of Hormuz and the Bab el-Mandeb could create a significant supply risk if disruptions persist. 

Red Sea Tensions Add To Risk Premium 

Concerns are not limited to the Strait of Hormuz. Yemen’s Houthi group said it had attacked what it described as a Saudi military ship and four escort vessels in the Red Sea using missiles. 

The developments have added another layer of uncertainty to global energy transportation, with both the Strait of Hormuz and Bab el-Mandeb playing an important role in the movement of oil and other commodities. 

Any escalation across these routes could further increase freight and insurance costs and potentially force traders to price in a larger geopolitical premium in crude. 

Iran-Oman Talks Offer Limited Hope 

There are still some signs that diplomatic efforts have not completely broken down. Iran has been separately negotiating with Oman over an agreement to manage the Strait of Hormuz and has indicated that the two sides are close to a deal. 

However, US President Donald Trump responded to those talks with a threat to bomb Oman, adding to uncertainty around the negotiations. At the same time, media reports suggested that Trump had opened back-channel discussions with Iran’s Islamic Revolutionary Guard Corps, providing a potential avenue for diplomacy despite the broader deterioration in relations. 

US Inventories Could Provide Additional Support 

Oil prices could also receive support from developments in the US domestic market. A preliminary Reuters poll showed that US crude oil inventories were expected to have declined last week, along with product inventories. 

A drawdown in crude stockpiles would reinforce the bullish supply narrative at a time when geopolitical risks are already putting pressure on the outlook. Traders will therefore be watching official US inventory data closely for further clues on the balance between supply and demand. 

India Faces Higher Oil Import Risk 

For India, the rise in crude prices is a key concern because the country relies heavily on imported oil to meet domestic demand. Brent crude remaining above $90 a barrel could increase pressure on the country’s import bill and the rupee while adding to inflationary risks. 

Higher crude prices could also weigh on the profitability of oil-consuming industries, including airlines, paints, chemicals and other sectors with significant fuel or transportation costs. Upstream oil producers, meanwhile, could benefit from stronger international crude prices. 

The near-term direction of oil prices is likely to remain closely linked to developments in the Middle East, particularly the prospects of a renewed US-Iran agreement and the restoration of normal shipping through the Strait of Hormuz. Until there is greater clarity on those fronts, geopolitical risk is likely to keep crude prices elevated and remain an important headwind for global markets, including Indian equities. 

Source

•  oilprice.com