Oil Prices Remain Elevated Amid Geopolitical Disruptions

Crude oil prices have remained elevated due to concerns over a potential U.S., Iran deal, leading to tightening supply. The International Energy Agency (IEA) reported that global oil markets tightened further in July, with all aspects of demand, supply, refining runs, and inventories affected by renewed geopolitical disruptions and high fuel prices.

The IEA noted that the 2026 oil demand outlook was revised lower, with a decline of 1.6 million barrels/day expected, down from last month's estimate by 510k b/d. This reduction is attributed to the closure of the Strait of Hormuz and high prices weighing on consumption.

Supply rose to 101.5 million b/d in July but remained below year-earlier levels, with Gulf output still largely shut in. Refinery crude throughputs climbed to 80.9 million b/d in July but remained nearly 5 million b/d below last year's levels. Observed inventories fell by 69 million barrels in July.