LONDON — On Wednesday, oil prices experienced fluctuations, initially rising by $1, but later declining as forecasts for global oil demand in 2026 were revised down. This adjustment coincided with stalled negotiations over the Iran conflict and ongoing attacks on vessels in the Middle East.
Brent crude futures dropped by 49 cents, or 0.55%, settling at $88.42 a barrel by 1315 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude also fell, down 25 cents, or 0.3%, to $82.95.
The Organization of the Petroleum Exporting Countries (OPEC) announced in its latest report that it has lowered its prediction for global oil demand growth in 2026 to 580,000 barrels per day. In contrast, the International Energy Agency (IEA) has also cut its demand forecast for 2026, anticipating a decline of 1.6 million barrels per day this year. The Paris-based agency, however, estimates that supplies will decrease by 4.3 million barrels per day, resulting in an overall shortfall of approximately 1.27 million barrels per day in 2026.
Additionally, U.S. crude inventories increased notably last week, as suggested by preliminary data from the American Petroleum Institute. Confirmation from the Energy Information Administration later Wednesday could alleviate market worries about supply constraints, according to analysts from Haitong Futures.
Two ships attacked in the Middle East
Prices initially gained traction after a senior Iranian official indicated to Reuters that there had been no discussions with the United States regarding an extension of the ceasefire, adding that, from Iran’s viewpoint, the agreement lacked a definitive start date.
On Tuesday, both the U.S. and Yemen’s Iranian-aligned Houthis reported separate incidents involving attacks on ships in the Strait of Hormuz and Bab el-Mandeb, which are crucial channels for oil and gas exports, alongside the Suez Canal.
Reports indicated that the number of vessels navigating through Hormuz fell to eight on Tuesday, marking the lowest count in a week. Before the conflict, the daily passage typically ranged between 125 and 140 ships.
