Crude Oil Prices Rise as US-Iran Peace Hopes Fade and Supply Risks Grow | August 18, 2026

Oil prices moved higher on Tuesday, August 18, 2026, as hopes of a lasting US-Iran peace deal weakened. Iran has said it could take a more offensive military approach, while the US has ruled out extending the current ceasefire, as per news reports. The developments have renewed concerns about oil supplies from the region. 

Brent crude futures were up 27 cents, or 0.3%, at US$91.14 a barrel by 0003 GMT. The benchmark had already climbed to its highest level since July 30, 2026, in the previous session.  

US West Texas Intermediate crude gained 42 cents to US$85.04 a barrel after touching US$85.37 earlier, its highest level since July 31, 2026. 

Strait of Hormuz Traffic Falls Sharply 

The Strait of Hormuz remains at the centre of the supply concerns. Ship movements through the waterway have dropped sharply following attacks on tankers. 

Kpler data showed that just 5 commodity vessels crossed the strait on Saturday, while none were recorded on Sunday. That compares with 31 vessels during the previous weekend. 

Tim Waterer, chief market analyst at KCM, said the lack of progress on reopening the strait was keeping pressure on oil markets, with shipping activity still at very low levels. 

Red Sea Tensions Add to Supply Concerns 

Risks are not limited to the Strait of Hormuz. Yemen’s Houthis said they had attacked a Saudi military ship and four escort vessels in the Red Sea with missiles. 

The Strait of Hormuz and Bab el-Mandeb are both important routes for energy shipments. Continued disruption at either point could make it harder for oil and other commodities to reach international markets. 

Read More: Cochin Shipyard Share Price in Focus as Q1 FY27 Net Profit Falls 19% to ₹151.5 Crore! 

Diplomatic Talks Continue 

Iran is also negotiating with Oman over arrangements for managing the Strait of Hormuz and says the two sides are close to an agreement. The talks have faced pressure after US President Donald Trump threatened military action against Oman. 

There has been one possible sign of movement behind the scenes. Media reports said Trump had opened back-channel discussions with Iran’s Islamic Revolutionary Guard Corps, leaving some room for diplomacy despite the broader tensions. 

Conclusion 

For oil traders, the next moves will depend heavily on the conflict and shipping activity in the region. A breakthrough in talks could take some pressure off prices, while further military action or prolonged disruption around key waterways could keep crude elevated. 

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