Oil Price Today, August 17: Oil prices climbed over 1 per cent during early Asian trading on Monday as a sharp drop in vessel traffic through the Strait of Hormuz over the weekend, amidst an ongoing Middle East conflict with no peace agreement in sight between the United States and Iran, heightened concerns over supplies.
Brent crude futures gained 60 cents, or 0.7 per cent, to $89 per barrel, while U.S. West Texas Intermediate (WTI) crude futures slipped 40 cents to $83 a barrel.
The slowdown comes after both the benchmarks surged more than 5 per cent last week following attacks on tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz and an attack on a Saudi Aramco refinery.
Over the weekend, Iranian Foreign Minister Abbas Araqchi stated that Iran is still undecided about resuming talks with the United States to end the war, amid disagreements about ceasefire violations and the future of the Strait of Hormuz.
“We have not yet made a decision to restart negotiations with the United States,” Iranian Foreign Minister Abbas Araghchi said in a post on Telegram on Saturday, reiterating remarks he made to Iranian news outlet Shahrara News.
US President Donald Trump, meanwhile, urged Americans to endure temporarily higher gasoline prices while the confrontation persists.
According to Kpler shiptracking data, maritime traffic through the Strait of Hormuz experienced a significant slowdown over the weekend following the tanker attacks.
Data from Kpler further revealed that only five commodity vessels navigated the passage on through the strait on Saturday, with zero registrations were recorded on Sunday, contrasting sharply with the 31 vessels logged during the previous weekend.
According to the Emirati state news agency WAM, the United Arab Emirates accused Iran of attacking a third ADNOC-operated vessel passing through the strait on Friday.
Earlier, the UAE had blamed Iran for two incidents involving ADNOC ships on Thursday evening. The duration of the disruption remains a crucial factor for crude price trajectories.
JPMorgan predicts Brent prices to rise by $7 to $8 per barrel
JPMorgan predicts that each month of sustained disruption could push Brent prices up by $7 to $8 per barrel. If the shipping halt persist for three months, the bank expects average monthly Brent crude prices reaching approximately $114 per barrel.
Goldman Sachs forecasts Brent crude to average $80 per barrel in fourth quarter
Goldman Sachs similarly cautioned that Brent crude could rise to $120 per barrel if shipping disruptions in the Strait of Hormuz, the world’s most vital oil transit route, continue unabated.
Goldman Sachs, meanwhile, projects that Middle Eastern geopolitical tensions will ultimately ease under its base-case scenario. The bank forecasts Brent crude to average $80 per barrel during the fourth quarter and $75 per barrel next year.
However, it noted that market risks remain tilted to the upside, given that transit blockades across the Strait of Hormuz and the Red Sea could endure longer than initially expected.
