The U.S.-Iran Stalemate Over The Strait Of Hormuz Continues. Oil Prices Are Edging Down Anyway.

Oil prices are edging down on Wednesday even though the stalemate over the Strait of Hormuz continues.

Brent crude, the international benchmark, fell 0.83% and stood just above $88 a barrel at 11:26 a.m. ET, while West Texas Intermediate, the U.S. benchmark, dropped more than 1% and clocked in at $82.36 a barrel at the same time.

In this context, a senior Iranian official told Reuters that there have been no breakthroughs in the conflict.

“One of the issues that is being discussed ⁠via mediators is the U.S. returning to the interim agreement and defining a timeframe for implementing its ​commitments. There has been absolutely no progress on this issue,” the official told the outlet.

“The United States violated the interim agreement 48 hours after it was reached ​and withdrew from it a few days later,” the official added.

CNBC noted that Turkey’s Andolu news outlet claimed that the U.S. and Iran had agreed to extend a 60-day ceasefire.

Global oil demand continues to drop as traffic through the waterway remains halted. The International Energy Agency (IEA) said it is expected to fall further.

The agency said in a report this week that it expects global demand to drop by 1.6 million barrels a day, a 510,000 increase compared to the July forecast.

“Annual contractions will nevertheless ease from 4.9 mb/d in 2Q26 to 2.8 mb/d in 3Q26, before returning to growth in the final quarter. Global oil demand is projected to expand by 2.4 mb/d in 2027,” the report adds.

It went on to note that that global oil supply “rose by 2.4 mb/d to 101.5 mb/d in July, but remained 6.3 mb/d below year-ago levels, with 8.3 mb/d of Gulf output still shut in.”

“Renewed hostilities and maritime disruptions in July and early August undermined the recovery efforts, reducing projected 3Q26 oil supply by 1.7 mb/d compared with last month’s Report,” the IEA added.

The agency also noted that global oil inventories kept decreasing, falling below 7.9 billion barrels in July for the first time since April last year.

“Although the market is projected to return to surplus towards the end of this year, risks remain substantial and the urgency of reopening the Strait has increased, as previously available inventory buffers are rapidly depleting,” reads a passage of the report.

U.S. inventories in particular have been dropping as well. The Strategic Petroleum Reserve (SPR) fell to its lowest level in more than 40 years, according to data from the Department of Energy. It showed that the SPR stood below 300 million barrels last week, the lowest since January 1983.