Oil prices declined after U.S. Energy Secretary Chris Wright said crude exports through the Strait of Hormuz were higher than many independent estimates. Markets continue to monitor supply risks as tensions in the Middle East remain elevated and negotiations to increase shipping traffic through the key waterway remain unresolved.
Oil Prices Decline After Export Comments
U.S. West Texas Intermediate crude futures fell 2.4% to close at $81.25 per barrel, while Brent crude, the international benchmark, declined about 2% to settle at $87.07 per barrel.
Despite Thursday’s decline, oil prices remained higher by around 4% for the week as traders continued to assess the impact of disrupted shipping routes and uncertainty surrounding a potential agreement between Washington and Tehran.
Hormuz Export Estimates Differ
Energy Secretary Chris Wright said oil exports through the Strait of Hormuz had approached a seven-day average of 9 million barrels per day, with total Gulf exports rising to around 15 million barrels per day when pipeline flows are included.
Before the conflict, approximately 20 million barrels per day of oil and petroleum products moved through the Strait of Hormuz.
Wright’s figures are significantly higher than estimates from several independent market analysts. TD Securities, for example, estimated Hormuz exports at around 5 million barrels per day, which analysts said remains insufficient to fully support global demand.
Supply Concerns Continue Despite Higher Flows
Wright said U.S. military and Department of Energy data provide the most accurate information on oil movements from the Arabian Gulf, adding that some private companies may underestimate exports because some vessels are moving covertly through the waterway.
The International Energy Agency expects global oil demand to decline by 1.6 million barrels per day this year, around 510,000 barrels per day more than previously forecast. The agency said renewed conflict in the Gulf has limited efforts to increase global supply.
Global oil supply was 6.3 million barrels per day lower year over year in July, with around 8.3 million barrels per day of Gulf production offline, according to the IEA.
Middle East Shipping Risks Remain
Security concerns remain high for energy shippers following attacks on vessels in the Gulf of Oman and the Red Sea.
Iran-backed Houthi forces in Yemen also claimed responsibility for targeting a refinery in Saudi Arabia’s Jizan region with drones, adding to concerns over regional energy infrastructure.
Uncertainty Over Strait of Hormuz Control
The U.S. and Iran continue to dispute control over the Strait of Hormuz. Tehran has claimed it closed the waterway and said reopening depends on Washington meeting its demands, while President Donald Trump said the U.S. has full control over the strait.
The Trump administration previously suggested a possible agreement with Iran to increase shipping through Hormuz, but no deal has been reached.
Amos Hochstein, former energy adviser to President Joe Biden, said political statements surrounding the situation should be viewed cautiously, arguing that market participants should focus on actual supply and shipping conditions.
