Oil prices closed higher in Tuesday's trading (August 18), reaching their highest levels in over three weeks. Brent crude rose slightly by about 0.2% to US$91.02 per barrel, while WTI gained approximately 0.5% to reach US$84.94. Both contracts recorded their highest closing prices since July 24.

Market sentiment continues to be bolstered by Iran's hardline stance, with the country declaring it will adopt a more offensive military approach and maintain the closure of the Strait of Hormuz. Simultaneously, the United States has refused to extend a temporary ceasefire agreement, further diminishing the likelihood of a near-term resolution to the conflict.

However, the rise in oil prices has begun to stall as the market observes that some supplies are still successfully exiting the Gulf region. Saudi Aramco has resumed oil loading from within the Hormuz area and is offering cargoes via ship-to-ship transfers near Fujairah, United Arab Emirates.

Two major Chinese shipping companies have

Two major Chinese shipping companies have also begun lifting oil cargoes from outside the Gulf. Additionally, reports indicate that some vessels continue to transit the Strait of Hormuz with their transponders turned off, suggesting that actual export volumes may exceed official shipping data.

These oil flows have helped alleviate fears of an extreme supply shortage. Nevertheless, observed vessel traffic through the Strait of Hormuz remains at very low levels, meaning the risk of supply disruption has not been entirely eliminated.

Newsmaker Analysis: Brent crude retains geopolitical support as long as the Strait of Hormuz remains disrupted and US-Iran diplomacy stays deadlocked. However, the success of Gulf producers in maintaining some exports suggests the rally may be limited. As long as Brent holds above US$90, the potential to reach the US$92–US$95 range remains, whereas an increase in oil flows could trigger a correction back toward the US$89–US$88 area.