Crude Oil Prices Rebound as Middle East Supply Risks Persist | August 4, 2026

Crude oil prices recovered modestly on Tuesday, August 4, 2026, after suffering steep losses in the previous session, as investors reassessed the outlook for global energy supplies amid continuing tensions in the Middle East, as per news reports.  

While hopes of diplomacy briefly weighed on prices, uncertainty surrounding the U.S.-Iran conflict continued to support the market. 

Brent crude futures gained US$0.62, or 0.7%, to US$84.39 per barrel after falling 7% on Monday to a three-week low. U.S. West Texas Intermediate (WTI) crude also rose US$0.61, or 0.7%, to US$80.95 per barrel, following a decline of more than 5% in the previous session. 

U.S.-Iran Tensions Keep Oil Markets Volatile 

Oil prices had dropped after U.S. President Donald Trump stated that he was delaying further military action against Iran while awaiting progress in talks aimed at ending the conflict and resolving disputes over the Strait of Hormuz. 

However, Iran's Foreign Ministry dismissed those claims, stating that no negotiations with the United States were underway and no meetings had been scheduled. The conflicting statements have fuelled uncertainty over the prospects for a diplomatic breakthrough. 

Strait of Hormuz Remains a Key Risk 

The Strait of Hormuz continues to be a major source of concern for energy markets. Before the conflict, the strategic waterway handled oil exports equivalent to around 20% of global daily consumption, making any disruption significant for global supply. 

Recent shipping data indicated that oil exports through the Strait of Hormuz increased to an average of 4.2 million barrels per day during the week ended July 31, compared with 3.2 million barrels per day in the previous week. Despite this improvement, shipping activity remains cautious due to ongoing security concerns. 

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Shipping Disruptions Add to Supply Concerns 

Several Saudi-flagged supertankers have altered their routes around southern Africa, while vessel traffic through both the Strait of Hormuz and the Bab el-Mandeb Strait has slowed following reports of attacks on commercial ships.  

The latest maritime incident involved a cargo vessel reportedly struck by an unknown projectile near Oman's Al Khasab. 

As per news reports, longer shipping routes, rising insurance costs and the continued threat of attacks are preventing crude oil prices from fully reversing their geopolitical risk premium. 

Conclusion 

Crude oil prices remain highly sensitive to developments in the Middle East. Until there is greater clarity on U.S.-Iran relations and shipping security around key energy routes, volatility is expected to persist in global oil markets. 

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