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US Oil Update: Crude Prices Ease as US-Iran Deal Prospects Remain Unclear

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Crude oil prices slipped on Wednesday as investors assessed mixed signals about a possible US-Iran agreement, with Pakistan indicating that efforts were underway to facilitate talks between the US and Iran.

Front-month West Texas Intermediate crude futures were down 0.47% to $82.81 per barrel, while Brent futures fell 0.56% to $88.41/bbl.

Pakistan Foreign Ministry spokesperson Tahir Andrabi on Wednesday said the country was working to bring the US and Iran to the negotiating table to restore the ceasefire and resolve disputes over the Strait of Hormuz.

Iran has not held talks with the US to extend the ceasefire because Tehran viewed the June deal as having no official start date, Reuters reported Wednesday, citing a senior Iranian source, following a Turkish media report claiming that the two countries have agreed to extend a 60-day ceasefire under their interim deal signed in June.

According to earlier reports, Iran said it would keep the crucial waterway closed until the US lifts the blockade on its ports and compensates for damage from their attacks.

Meanwhile, US President Donald Trump on Tuesday reportedly said that the US had "total control" of the Hormuz waterway, which accounts for 20% of the global energy flows. Trump further said that he did not trust Iran, accusing it of repeatedly lying to him, and warned that the country would be "blown away" if it challenged the US.

"Crude remains highly sensitive to the headlines, particularly with limited US Strategic Petroleum Reserve coverage, as another setback in negotiations could send prices higher while credible progress toward restoring shipping flows would likely reverse some of the latest gains," Gelber & Associates said in a note Tuesday.

"Shipping risks remain elevated after a deadly Houthi missile attack on a commercial vessel near the Bab el-Mandeb strait raised concerns that disruptions could spread beyond the Persian Gulf," it added.

The number of vessels passing through the Strait of Hormuz fell to a one-week low of eight on Tuesday as shipowners avoided the key route amid ongoing Middle East tensions, Reuters reported Wednesday, citing Kpler data.

The oil market also awaits the US Energy Information Administration's petroleum inventory report, scheduled for release at 10.30 ET on Wednesday.

Data from the American Petroleum Institute revealed Tuesday that US crude oil inventories increased by 9.07 million barrels in the week ended Aug. 7, following a 2.69-mmbbl increase the previous week, and compared with analysts' estimate of a 500,000-bbl decline, according to a Bloomberg-compiled survey.

In its August Short-Term Energy Outlook on Tuesday, the EIA said US commercial crude inventories should remain below the 2021-2025 five-year low through the end of 2026 as refiners maintain high runs and net imports stay low.

US commercial crude inventories declined each week from April 17 through June 26 and fell by 25 million barrels in May, 15 million barrels in June, and 4 million barrels in July.

Meanwhile, US crude net imports fell below 1 million b/d in April and May as crude exports reached historically high levels while imports declined, putting pressure on domestic stocks.

The Organization of the Petroleum Exporting Countries on Wednesday lowered its global oil demand growth forecasts for 2026 for the fourth straight month, projecting 600,000 barrels per day higher consumption this year than last.

Meanwhile, the International Energy Agency projected a 1.6 mmbbl/d drop in demand in 2026, 510,000 bbl/d more than its projection in July. Oil consumption will suffer from ongoing disruption to flows through the crucial Strait of Hormuz waterway and elevated fuel prices, the agency said.

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