Oil Prices Plummet on Weaker Demand Forecasts and Supply Concerns

Crude oil prices declined on Thursday despite ongoing tensions between the US and Iran. The Brent crude futures price fell by $1.29, or 1.5%, to $87.69 a barrel, while the West Texas Intermediate (WTI) crude price dropped by $1.30, or 1.6%, to $81.97 a barrel.

The drop in oil prices is attributed to weaker oil demand forecasts for 2026. Analysts have reduced their estimates due to disruptions caused by the conflict between the US and Iran. However, concerns over supply disruptions continue to limit price declines.

Negotiations between the two countries remain stalled, with no indication of progress toward reopening key waterways. The blockade on Iranian ports remains in place as part of efforts to intensify economic pressure on Tehran. A senior Iranian official stated that negotiations have made no headway, and a timeline for implementation has not been established.

The global oil market is expected to face a supply shortfall of 1.8 million barrels per day this quarter due to the conflict. The International Energy Agency (IEA) estimates that the deficit will be more than twice its earlier forecast.