(RTTNews) – After inching lower yesterday, crude oil prices continued to slump on Thursday following similar reports from energy agencies indicating that global oil demand is set to fall more heavily than previous expectations. The ongoing U.S.-Iran conflict and the resultant supply concerns limited the decline.
WTI Crude Oil for September month delivery was last seen trading down by $1.76 (or 2.11%) at $81.51 per barrel.
The Middle East crisis, which began after U.S.-Israeli forces attacked Iran, is now in its sixth month.
The Strait of Hormuz, which Iran shut soon after the war erupted, still remains effectively closed. As a result, shipping traffic in the region dipped to single digits.
Yesterday, the Organization of Petroleum Exporting Countries cut its global oil demand growth forecast for 2026 to 580,000 barrels per day.
This is the fourth such cut this year and is down from its previous 780,000 bpd. However, 2027 demand growth is seen at 2,160,000 bpd, up from earlier estimate of 1,940,000 bpd.
According to OPEC’s monthly oil market report, production by the alliance increased by 1,650,000 barrels in July to 23,630,000 barrels.
The report predicted that China, India, and the rest of Asia are slated to have a weaker year-on-year oil demand growth in 2026.
Separately, the International Energy Agency speculated a 1,600,000 bpd drop in oil demand for 2026, down from its prior forecast for growth of 1,000,000 bpd.
For the week ending August 7, data from the U.S. Energy Information Administration speculated a huge build in the U.S. crude oil inventories.
The numbers showed a massive increase of 17,400,000 barrels to 424,400,000 barrels versus market expectations for a 1,700,000 barrel decrease.
The plateauing of global economic growth due to restricted fuel supplies and the consequent rise in prices were highlighted by the groups.
Economists are of the view that though supply side disruptions initially supported crude oil prices, with the U.S.-Iran conflict showing no signs of easing, oil-linked inflation has restricted consumption globally.
As a consequence, agencies have downwardly revised their predictions for demand growth.
While the IEA predicted a slump, the OPEC expects demand growth but slashed its outlook.
Attack threats from Yemen’s Houthi rebels on ships transiting through the Bab al-Mandeb Strait, which served as an alternative route after the Strait of Hormuz was blocked, is adding to the supply concerns.
Negotiations between the U.S. and Iran have hit a deadlock.
After announcing that it had finalized a deal with Oman to manage the shipping traffic across the Strait of Hormuz, Iran demanded compensation for war-related damages from the U.S. and made it clear that it will not reopen the Strait of Hormuz until its demands are met.
In return, U.S. President Donald Trump wanted Iran to compensate for the loss of lives and properties in the several conflicts the nation had had with various other countries in the past 50 years.
Trump claimed that the U.S. has complete control over the management of the Strait of Hormuz.
Iran’s Fars new agency quoted Hojjatoleslam Hossein Taeb, the head of Iran’s Basij Paramilitary Unit as fiercely refuting Trump’s claims and stating that the strait is under Iran’s control and management.
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