Oil prices rise as U.S.-Iran tensions threaten Strait of Hormuz shipping

Global oil prices saw significant gains on August 17 and 18, 2026, as geopolitical tensions escalated in the Middle East. West Texas Intermediate (WTI) reached approximately $85.55 per barrel, while Brent crude climbed to $91.76, marking their highest levels since late July. This market volatility is driven by the collapse of diplomatic negotiations between the United States and Iran, as well as the ongoing conflict involving Israel and Hezbollah, which threatens regional energy supply stability.

The standoff over the Strait of Hormuz remains a primary concern for global energy markets. Iranian officials, including Deputy Foreign Minister Kazem Gharibabadi, have declared a shift to a “fully offensive” military posture following the failure to extend a ceasefire deal. Meanwhile, the U.S. has reportedly considered designating the Strait as a domestic territory, a move denounced by Tehran. Foreign Minister Abbas Araghchi stated that no current negotiations are underway, insisting that the U.S. meet specific Iranian conditions before maritime traffic can resume. These developments follow the military actions initiated by the U.S. and Israel against Iran on February 28, which initiated the current period of instability. Markets remain in a state of uncertainty as peace efforts remain frozen and supply routes through the strategic waterway stay effectively blocked.