Crude Prices Ease Amid US Inventory Surge and Strait of Hormuz Tensions

Crude oil prices have eased following a surge in US crude oil inventory, according to the latest data from the Energy Information Administration (EIA). The increase of 17.4 million barrels is the largest in over three years and has put pressure on oil prices. Despite this, prices remain supported by ongoing disruptions to global supplies, particularly through the Strait of Hormuz.

The International Energy Agency (IEA) reported that global oil inventories will fall at twice the previously estimated rate in Q3 due to ongoing disruptions from the US-Iran war. The IEA also stated that there appears to be little progress toward a US-Iran agreement to open the Strait of Hormuz, which is tightening global crude supplies and boosting oil prices.

Pakistan has suggested that the US and Iran are close to an arrangement that could reopen the Strait of Hormuz, while Al Jazeera reported that talks between Oman and Iran have reached an advanced stage. However, President Trump stated that the US has 'total control over the Hormuz Strait' and that 'we own it.'

Ukraine's drone attacks on Russian oil infrastructure are also providing support to crude prices. Energy Aspects reported that only an average of five vessels are transiting through the Strait of Hormuz, far below the 14 ships a day seen after the US and Iran reached a memorandum of understanding in June.