Oil prices steady as investors assess US-Iran war outlook

Oil prices remained relatively stable on Thursday (August 20) as traders weighed the implications of the escalating US-Iran conflict and the security of maritime routes through the Strait of Hormuz. Brent crude futures for October delivery climbed 25 cents, or 0.3%, to $91.87 a barrel, while West Texas Intermediate (WTI) crude for September slipped 2 cents to $85.81 a barrel. The more volatile October WTI contract rose 14 cents, or 0.2%, to $84.53.

Analysts noted that while oil prices held firm amid sporadic Middle Eastern attacks, they lacked significant impetus without a major escalation. Hiroyuki Kikukawa, chief strategist at Nissan Securities, suggested the market would likely continue its gradual upward trend given the ongoing uncertainty surrounding peace talks and tensions involving the UAE, Oman, and Iran.

On Tuesday, US President Donald Trump indicated that no negotiations were underway with Iran, while Iran claimed the Strait of Hormuz remained closed. This discord resulted in reduced shipping activity in the vital waterway, with most shipowners steering clear due to the uncertain reopening after the Iran war. Data released on Wednesday revealed a slight uptick in US crude and gasoline inventories, with crude supplies increasing by 4.4 million barrels in the week ending August 14, contrary to expectations of a 600,000-barrel reduction.