The United States now anticipates that the Middle East war-induced oil supply disruptions, resulting from ongoing conflict limiting transit through the critical Strait of Hormuz, will persist through the end of next year at a volume of approximately 600,000 barrels per day. According to estimates from the U.S. Energy Information Administration's Short-Term Energy Outlook, oil transport through the waterway averaged 4.9 million barrels per day in the second quarter of this year. This contrasts sharply with the average of 21.6 million barrels per day in the fourth quarter of 2025, prior to the U.S.-Israeli strikes on Iran.

These figures indicate that brief pauses in fighting, such as during the signing of a so-called memorandum of understanding, have done little to mitigate one of the most severe disruptions in the history of the global energy market. Despite officials stating that negotiations are progressing, an agreement between Iran and Oman to reopen the strait remains elusive. Furthermore, Iranian Foreign Ministry Spokesperson Baghaei previously stated that the U.S. maritime blockade and military actions against Iran are the primary obstacles to fully restoring safe navigation in the Strait of Hormuz. Baghaei emphasized that as long as the U.S. continues its maritime blockade and military operations, the Strait of Hormuz cannot meet the conditions for fully resuming safe navigation.

Meanwhile, U.S. President Donald Trump on Monday presented Iran with a new set of broad demands, including compensation for individuals killed as a result of actions against Iran. These conditions are likely to be rejected by Iran. The hardening of stances on both sides suggests that reaching an agreement to reopen the Strait of Hormuz may require a more protracted process, also dampening market hopes for a return to normalcy in Middle Eastern aluminum supply. However, according to the latest reports, on August 11, local time, Pakistani Defense Minister Khawaja Asif stated that the U.S. and Iran are close to reaching "some kind of arrangement." Asif said in an interview that the situation is again moving toward a favorable outcome for a peace arrangement or agreement, noting that "signals over the past two to three days indicate that we are close to reaching some kind of arrangement."

As the conflict enters its sixth month, global consumers once again face the prospect of rising fuel prices and inflation. The U.S. Energy Information Administration raised its 2026 gasoline and diesel price forecasts by 3.7% and 5.4%, respectively, and increased its 2027 retail gasoline price forecast by 6.5% compared to estimates from a month ago. Determining the real-time volume of oil transported through the Strait of Hormuz remains difficult, as ships have turned off their signals, obscuring shipping activity and leading to discrepancies in estimates among market participants. According to U.S. Energy Secretary Chris Wright, an average of approximately 9 million barrels of oil per day was shipped through the strait over the past week.

Due to limited capacity to transport oil to global markets and reduced available storage capacity, several Middle Eastern countries have been forced to cut production. However, the U.S. Energy Information Administration estimates that production outages in the Middle East eased in July, averaging about 5.5 million barrels per day, compared to 7.5 million barrels per day in June. But the agency also expects that the volume of shut-in oil in the Middle East will expand again in the third quarter to 6.6 million barrels per day. The report also assumes that recent threats to vessels transporting Saudi crude through the Bab el-Mandeb strait have not caused additional production outages. If this assumption holds, the agency expects that most production and trade flows will not return to pre-war levels until early 2027.

International oil prices remain volatile. As of the time of writing, Brent crude futures rose 0.89% to $89.70 per barrel, while WTI crude futures increased 1.06% to $84.08 per barrel. Over the past period, the market had bet on the resumption of traffic through the Strait of Hormuz and an easing of supply risks, but the latest news has once again reversed expectations. The most critical issue of navigation through the Strait of Hormuz remains unresolved. There is a fundamental disagreement between the U.S. and Iran over the strait: Iran wants to control it and collect service fees, while the U.S. demands free and unimpeded passage. Currently, Iran is primarily advancing negotiations with Oman. Any news of progress or breakdown in talks directly triggers wide daily swings in oil prices, and these event-driven, wide fluctuations cannot be eliminated in the short term; even if a temporary agreement is reached, it could become invalid at any time. In June, the U.S. and Iran reached a memorandum of understanding, but it completely failed within weeks.

Data from shipping tracker Kpler shows that traffic through the Strait of Hormuz has been at a "sluggish" level over the past week and declined further over the weekend just passed: 15 vessels passed through the strait on August 7, dropping to 11 on August 8, and then to 6 on August 9. With the unclear outlook for U.S.-Iran negotiations and the Strait of Hormuz remaining a focal point of conflict, international oil prices are in a phase of repeated fluctuations in the absence of new directional guidance. In the short term, geopolitics remains the primary focus of the crude oil market. Some analysts point out that the basic condition for oil prices to break out of their range is a weakening of geopolitical influence, but the global geopolitical landscape dominated by the U.S. is unlikely to return to its former relatively stable state.

Meanwhile, declining global crude oil inventories are also sounding alarm bells. Geopolitical events have led to a reduction in global crude oil production, and the release of strategic petroleum reserves by International Energy Agency member countries has caused global crude oil inventories to continue falling, further heightening concerns about supply shortages. According to the latest data released on August 10, as of the week ending August 7, the U.S. Strategic Petroleum Reserve fell by approximately 6.1 million barrels to 2.983 billion barrels, not only dropping below the 3 billion barrel mark but also hitting its lowest level since 1983, approaching the all-time low of 2.705 billion barrels set in April 1982.

The extremely low state of the global crude oil inventory buffer has significantly amplified price elasticity. The U.S. SPR has fallen to its lowest since 1983, inventories at Cushing continue to decline, and gasoline inventories have fallen below the five-year low. In this low-inventory environment, the impact of any supply disruption is directly transmitted to prices, and even if the Strait of Hormuz reopens, inventory rebuilding will take time. After prolonged shutdowns, oil fields face issues of declining reservoir pressure, so production ramp-up requires time. If the Strait of Hormuz remains in its current tense state for an extended period, the global oil supply will inevitably experience a period of tightness. However, over time, alternative oil export methods to shipping through the Strait of Hormuz will gradually emerge. From the perspective of navigating the Strait of Hormuz alone, the room for maneuver is small in the short term, but the market's flexibility for the medium to long term may gradually return to normal or near-normal levels.