Hormuz Tensions Fail to Boost Oil Prices Amid Shrinking Inventories

Oil prices are edging down despite ongoing tensions over the Strait of Hormuz, where traffic remains halted. The international benchmark Brent crude fell by 0.83% to just above $88 a barrel at 11:26 a.m. ET on Wednesday, while West Texas Intermediate dropped more than 1% to $82.36.

A senior Iranian official told Reuters that no breakthroughs have been made in the conflict. The U.S. has been urged to return to the interim agreement and define a timeframe for implementing its commitments, but there has been 'absolutely no progress' on this issue, according to the official.

The International Energy Agency (IEA) expects global oil demand to drop by 1.6 million barrels a day, a 510,000 increase compared to the July forecast. Global oil supply rose by 2.4 mb/d in July but remained 6.3 mb/d below year-ago levels.

U.S. inventories are also dwindling, with the Strategic Petroleum Reserve (SPR) falling to its lowest level in more than 40 years. The SPR stood at below 300 million barrels last week, a level not seen since January 1983.