Week in Review – Oil Prices Rise With Global Supply Tightening

Oil prices moved slightly higher on Friday, with the market still focused on uncertainty surrounding the Strait of Hormuz and the outlook for global supply. Prompt WTI futures were trading near $81 per barrel and were on track to finish the week almost $4 per barrel higher, while Brent was trading around $87.

The Strait of Hormuz remains at the center of market attention. Transit through the waterway appeared to slow significantly on Friday after two more vessels were attacked, while negotiations between the United States and Iran have made little progress. Only nine vessels crossed the Strait on Thursday, compared with an August average of 12, and no visible crossings had been recorded early Friday. Before the conflict, more than 130 ships moved through the Strait each day.

Measuring how much oil is actually moving through the region has also become increasingly difficult. Some tankers are switching off their tracking systems while moving through the Strait, and approximately 62% of oil and product tankers crossing between July 14 and early August did so without transmitting their location. Some transits have lasted more than a week.

Official estimates and vessel-tracking data continue to show a wide gap. U.S. Energy Secretary Chris Wright said the seven-day average of oil leaving the Strait had climbed to almost 9 million barrels per day. However, Kpler data showed crude exports through Hormuz at 2.77 million barrels per day during the week beginning July 27 and 1.74 million barrels per day during the week beginning August 3.

Looking at the broader Middle East provides a similar picture. Kpler estimated crude shipments at 9.53 million barrels per day during the week beginning August 3, while LSEG estimated Middle Eastern exports at 9.33 million barrels per day during the first 12 days of August. Both remain well below the 18.7 million barrels per day Kpler recorded during the three months before the conflict began.

That uncertainty is becoming more important because inventories are also tightening. Global visible oil stocks have been drawing at an average rate of 6.2 million barrels per day since July 13, while global trackable demand has recovered from its May low to just 1% below year-ago levels. About two-thirds of that rebound has been driven by China.

At the same time, Washington is increasing economic pressure on Iran. The U.S. has threatened additional sanctions while maintaining its blockade of Iranian ports, with Treasury Secretary Scott Bessent signaling that further measures could be announced next week. Iran, meanwhile, has said it will not reopen the Strait until conditions tied to sanctions and frozen assets are addressed.

There are some signs that oil movements may be starting to recover in parts of the region. A second supertanker was seen at Saudi Arabia's primary Persian Gulf export terminal this week, suggesting loading activity may be picking up. However, continued attacks are limiting confidence that supply conditions are normalizing. The Houthis said they targeted Saudi Aramco's Jazan refinery for the second time in less than a week, while a Ukrainian drone strike hit Russia's largest Baltic port as attacks on Russian energy infrastructure continued.

Refined products, especially diesel, are becoming an even greater concern. Diesel cargoes in Europe are now more expensive than jet fuel for the first time in more than a year. Europe has been able to increase jet fuel imports from the United States, Nigeria and other suppliers, but replacing lost diesel supply has proven more difficult. Russian export restrictions, Ukrainian attacks on Russian refineries and disruptions to Middle Eastern supply are all contributing to tighter availability.

European jet fuel imports increased to 750,000 barrels per day in June, the highest level since October 2025, and remained near that level in July. Diesel imports moved in the opposite direction, falling from 1.97 million barrels per day in January to 1.56 million barrels per day in July.

Diesel prices have consequently resumed their climb and are now only 14% below their April peaks. Jet fuel prices have also risen, but remain 25% below their March records. Goldman Sachs also noted that diesel markets were already structurally tighter than crude before the Iran conflict, while supply disruptions in the Middle East and Russia have had a larger impact on refined products. Seasonal demand could add further pressure during the fourth quarter, when diesel consumption typically increases.

Prices in Review

Crude prices moved higher early in the week before giving back some of those gains toward Friday. Prices opened at $78.42 on Monday, climbed to $82.35 on Tuesday, and then rose to $83.49 on Wednesday. Prices then eased to $82.70 on Thursday and $81.27 on Friday. Overall, crude prices increased by $2.85 per barrel, representing an approximate gain of 3.6% throughout the week.

Diesel prices climbed steadily through most of the week before easing slightly on Friday. Prices opened at $3.9015 on Monday, jumped to $4.1687 on Tuesday, then continued higher to $4.2839 on Wednesday and $4.2997 on Thursday, the week's high. Prices pulled back modestly to $4.2357 on Friday. Overall, diesel prices increased by $0.3342 per gallon, representing an approximate 8.6% gain during the week.

Gasoline prices strengthened through most of the week before pulling back slightly on Friday. Prices opened at $2.9820 on Monday, rose to $3.1359 on Tuesday, then edged higher to $3.1390 on Wednesday and $3.1500 on Thursday. Prices eased to $3.1119 on Friday but still finished above Monday's level. Overall, gasoline prices increased by $0.1299 per gallon, representing an approximate 4.4% gain during the week.