Hormuz Attacks Push Oil Toward $100 Despite US Crude Build

Crude oil, tracked here through the United States Oil Fund (AMEX:USO), traded at 134.64 dollars on August 22, up a modest 0.07 percent for the day but sitting near the top of its 52 week range of 102.42 to 142.33 dollars. The gain looks small on paper, yet it caps off weeks of tension in which Hormuz attacks push oil markets toward levels not seen since the strait crisis began escalating.

At a Glance

• USO trades at 134.64 dollars, up 0.07 percent on the day, with an RSI of 61.37 signaling firm but not overheated momentum
• Brent crude was on pace for a roughly 5 percent weekly gain as Iran struck vessels transiting Hormuz
• OPEC cut its 2026 demand growth forecast to 580,000 barrels a day, its fourth straight downgrade
• The IEA projects a 4.3 million barrel a day supply drop in 2026 even as high prices destroy demand
• Saudi Aramco is negotiating September cargoes ship by ship as shipowners avoid both Hormuz and the Red Sea

Why Hormuz Attacks Push Prices Toward the Century Mark

Tehran has stepped up strikes on tankers attempting to pass through the strait, and Washington has responded by tightening its naval blockade on Iranian crude exports. Neither side is backing down. Iran maintains that no vessel may transit Hormuz without its consent, a direct rebuttal to statements from President Trump claiming the United States holds full command of the waterway. Iranian officials have tied any reopening to political concessions from Washington, which leaves little room for a quick resolution.

That standoff is the main reason Brent has been closing in on 100 dollars a barrel, up from roughly 88 dollars just a week earlier. A build of 17 million barrels in US crude inventories, an unusually large figure, took some edge off the rally, but traders seem to be weighing geopolitical risk far more heavily than domestic stockpiles right now.

USO's own price action tells a similar story. The RSI reading of 61.37 suggests buyers still have room to push higher before the fund enters overbought territory, and the fact that USO sits well above the midpoint of its yearly range shows how much ground crude has recovered since its 52 week low of 102.42 dollars.

Demand Forecasts Keep Sliding in Opposite Directions

OPEC and the International Energy Agency can't agree on where demand is headed, but both see trouble. OPEC trimmed its 2026 global demand growth outlook to just 580,000 barrels a day, the fourth consecutive monthly cut tied directly to the Hormuz crisis. The IEA takes a starker view, forecasting a 1.6 million barrel a day drop in demand as record fuel prices choke off consumption, even as it expects global supply to fall by 4.3 million barrels a day next year. That combination would widen the third quarter deficit to 1.8 million barrels a day, according to the agency's monthly report.

Supply Chains Bend Under Pressure From the Gulf to the Black Sea

Saudi Aramco has been forced to negotiate September allocations with Asian buyers one contract at a time, since shipowners are steering clear of both Hormuz and the Red Sea. Aramco's formula prices have slipped to a six year low even as the company raised output by more than a million barrels a day to 8.2 million barrels a day in July. Only 200,000 barrels a day of that increase actually reached export markets, with the rest going into domestic storage that now sits at its highest level since at least 2016, a consequence of disruptions around Bab el Mandeb.

Russia's fuel exports have taken a separate hit. Seaborne refined product shipments fell by a third month over month in July to 3.93 million tonnes, roughly half of what they were a year ago, hurt by reduced refinery runs and a diesel export ban. A Ukrainian drone strike this month also knocked out the 115,000 barrel a day Orsk refinery entirely, and repairs to its distillation unit could take up to six months, forcing fuel rationing in the surrounding Orenburg region.

Elsewhere, the fallout from the shipping war has spread beyond fuel markets. Ukraine has reportedly floated a truce with Russia to stop attacks on civilian vessels and ports in the Black Sea after grain shipments dropped 76 percent year on year this month. A slick from the sanctioned tanker Caroline Bezengi has spread over 2,000 square kilometers and reached Oman's coast, threatening a marine reserve there. QatarEnergy, meanwhile, has extended force majeure on LNG deliveries to India through August, with Qatar's share of Indian LNG imports falling from over 45 percent last year to just 12 percent now.

What Happens if the Strait Standoff Drags On

None of the bigger supply projects in the pipeline look ready to offset a prolonged Hormuz disruption anytime soon. Alaska's proposed LNG export project hit another snag when a needed tax bill stalled in the state legislature, complicating financing for developer Glenfarne. Argentina's Vaca Muerta shale play offers a brighter long term signal, with recoverable oil estimates nearly doubling to 30.1 billion barrels, but that supply won't move markets before 2027 at the earliest. For now, the question that matters most is whether Iran's naval campaign eases or intensifies in the coming weeks, since that single factor looks set to decide whether Brent settles back down or pushes straight through the 100 dollar mark.

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