Oil Prices Retreat Amid Optimism Over Disrupted Supplies

Oil prices have retreated from their highs this week due to optimism over disrupted Saudi Arabia supplies and technical indicators. WTI's high was $107.75/bbl on Tuesday, while Brent crude reached its peak at $109.80/bbl on Friday. Despite the decline, WTI is higher on the week, matching levels not seen since mid-May.

The Strait of Hormuz has seen a significant reduction in oil passage, with tanker tracker Kpler estimating 10 million b/d made it through this past week, down from the pre-war level of 17-20 million b/d. Iranian leadership has stated that the strait will not be opened fully until President Trump leaves office in January 2029.

Meanwhile, the International Energy Agency (IEA) reduced its 2026 demand picture by 2.5 million b/d, the largest crude demand destruction since the 2020 pandemic and the second worst in 60 years' time.