13.08.202609:06 Forex Analysis & Reviews: Six Days of Gains and +12%: Oil at $89 Amid a Stalemate in Negotiations over the Strait of Hormuz

Today, Brent crude rose again by 0.6 percent to $89.45 a barrel, extending its rise to a sixth consecutive day, the longest winning streak since April. WTI trades at $82.80 a barrel. The reason for the sustained rise remains the situation around the Strait of Hormuz, where negotiations between the U.S. and Iran are not just stalling but, it seems, moving in the opposite direction. Both sides have noticeably hardened their positions.

Positions on both sides are hardening. President Trump declared "full control" over the channel, while Tehran demanded that users "remedy" any environmental damage caused to the local community. Negotiations between the U.S. and Iran, apparently, have reached an impasse: Washington continues to blockade ports of the Islamic Republic, increasing economic pressure on Tehran. Pakistan, acting as a mediator, said the broader peace process has stalled, although the deadline for signing a memorandum of understanding between the parties may be extended.

The fundamental picture has sharply worsened according to the leading specialized agency. The International Energy Agency said the global oil market will face a deficit of 1.8 million barrels per day this quarter, more than double the previous forecast, as the war between the U.S. and Iran drags on. For the whole of 2026, the deficit is likely to be the largest in five years, the agency said. At the same time, the IEA warned that oil demand is beginning to decline due to high prices.

However, U.S. inventory data delivered a surprise in the opposite direction. According to the Energy Information Administration, U.S. crude inventories rose by 17.4 million barrels last week, the largest increase since January 2023.

Until diplomatic efforts lead to the reopening of the strait and predictability in output improves, the situation is unlikely to change for the better. In the latest U.S. inflation report, the effects are most visible on consumers. According to the American Automobile Association, gasoline and diesel have not been so expensive for Americans in recent years. This is especially painful during the season when millions of people traditionally take car trips for vacations and to visit relatives.

As for the current technical picture for oil, buyers need to take the nearest resistance at $84.40. This would allow targeting $86.60, above which a breakout will be rather difficult. The farthest target is the $89.56 area. In the event of a decline, bears will try to take control of $81.50. If they succeed, a break of the range will deal a serious blow to bulls and push oil down to a low of $78.70, with a prospect of moving to $76.30.