Oil Prices Plunge as Demand Forecasts Worsen Global Outlook

Oil prices remained volatile on Thursday, August 13, as traders weighed conflicting signals on a potential U.S.-Iran agreement over the Strait of Hormuz. The West Texas Intermediate (WTI) benchmark fell to $82.11 per barrel, down 1.39% from the previous session, while Brent crude dropped to $87.92, down 1.19%. Both benchmarks extended losses through the European morning, with quotes reaching $81.32 for WTI and $87.04 for Brent.

The overnight path was orderly, but selling accelerated into the European open and again ahead of the U.S. producer price release. Over the past month, WTI has risen 3.49% and Brent 3.76%. Year over year, the gains are far larger: WTI up 28.38% and Brent up 31.53%. Those twelve-month figures capture the entire distortion of 2026, a market that has been repriced by war rather than by fundamentals.

Wednesday's session was the more instructive one, with Brent fluctuating around $89 as traders weighed conflicting signals on a potential U.S.-Iran agreement. However, Thursday flipped the balance, and the market spent the following session pricing the reduced demand forecasts from OPEC and the International Energy Agency (IEA) rather than the geopolitical overhang.

The IEA now expects global oil demand to contract by 1.6 million barrels per day this year, a 510,000 barrel per day larger decline than its July estimate, which had assumed Hormuz flows would gradually recover. OPEC has cut its 2026 demand growth forecast in three consecutive monthly reports.