Archive · 28 Aug 2026
Oil prices extend losses as diplomacy offsets US-Iran tensions
Oil prices went down on Friday even though tensions between the United States and Iran continued.
Brent and WTI are two important oil price measures.
Both were expected to have their first losing week after two weeks of gains.
Prices fell partly because Iran and Oman made progress on managing shipping through the Strait of Hormuz.
Traders are still unsure whether this agreement will improve actual oil shipments.
The United States has also announced very tough sanctions against Iran.
Iran called those sanctions hostile and ineffective.
Tensions involving Russia, Ukraine, and Britain added more uncertainty.
Analysts say prices could quickly rise or fall depending on diplomacy and refinery activity.
Brent crude fell 25 cents to $89.45 a barrel, while WTI declined 22 cents to $83.31.
Brent was heading for a 5.3% weekly loss and WTI for a 4.3% decline.
Progress between Iran and Oman on the Strait of Hormuz weighed on prices despite continuing geopolitical tensions.
Analyst Kaynat Chainwala said prices remain vulnerable to sharp reversals if the proposed maritime corridor faces setbacks.
Choice Broking expects refinery maintenance from September to November to tighten product availability and support refining margins.
- Who
- Oil traders, the United States, Iran, Oman, Russia, Ukraine, Britain, and analysts including Kaynat Chainwala and Choice Broking.
- What
- Crude oil prices declined despite US-Iran tensions, while diplomatic progress concerning the Strait of Hormuz influenced the market.
- When
- Friday; Brent and WTI were also headed for weekly losses after two weeks of gains.
- Where
- Global oil markets, with developments involving the Strait of Hormuz, Iran, Oman, Russia, Ukraine, and Britain.
- Why
- Diplomatic progress on the Strait of Hormuz outweighed a smaller-than-expected US inventory build, while uncertainty remained over sanctions, negotiations, and physical oil flows.
Factors Supporting Oil Prices
Factors Pressuring Oil Prices
Geopolitical risk
Factors Supporting Oil Prices
US-Iran tensions, sanctions, and wider Russia-related military threats could disrupt supply or shipping and support prices.
Factors Pressuring Oil Prices
Prices declined despite these tensions, suggesting traders were focusing more on diplomatic developments and the absence of evidence of worsening physical flows.
Strait of Hormuz diplomacy
Factors Supporting Oil Prices
A finalized maritime corridor, joint administration structure, and improved traffic management could eventually support more predictable shipments.
Factors Pressuring Oil Prices
The agreement is not yet complete, and any delay to the 30-to-60-day timeline could trigger sharp price reversals.
Refinery maintenance
Factors Supporting Oil Prices
Choice Broking expects September-November refinery maintenance to tighten product availability and support refining margins.
Factors Pressuring Oil Prices
Near-term prices remain under pressure, with both benchmarks heading for weekly losses despite the expected maintenance-related support.
- Brent price
- $89.45 a barrel, down 25 cents or 0.3% on Friday.
- WTI price
- $83.31 a barrel, down 22 cents or 0.3% on Friday.
- Weekly performance
- Brent was set for a 5.3% weekly decline; WTI was set for a 4.3% decline.
- Strait of Hormuz agreement
- Iran and Oman agreed on each country's share of the strait's waters and related revenues.
- Proposed corridor timeline
- Iranian officials cited 30 to 60 days to finalize a new maritime route.
- Sanctions
- Washington described its latest measures against Iran as the toughest sanctions in history.
- Choice Broking forecast
- Brent is expected to average $84 a barrel in FY27 and $86 in July-September 2026.