Crude oil benchmarks closed higher on Tuesday, August 11, 2026, in a volatile session dominated by Middle East geopolitical headlines and conflicting signals on diplomatic progress, according to investinglive.com. Brent crude futures rose approximately one dollar to settle near eighty-nine dollars per barrel, while West Texas Intermediate crude added a similar amount to close around eighty-three dollars, extending Monday's roughly five percent gain that came as hopes for a swift US-Iran peace deal began to fade. Both benchmarks posted their highest closes since July 31 for a second consecutive session.
The session experienced multiple directional reversals. Prices initially pushed higher, with Brent and WTI touching intraday peaks near ninety and eighty-five dollars respectively, after Yemen's Houthi rebels attacked a Saudi vessel carrying military equipment near the Bab al-Mandeb strait. This upside was erased entirely on more constructive signals from mediators: Qatar's foreign ministry said talks between Oman and Iran over the strait had reached an advanced stage, while Pakistan's defence minister suggested the US and Iran were close to some form of agreement.
Both benchmarks slipped to session lows near eighty-seven and eighty-one dollars on that news, before reversing higher again after the Wall Street Journal reported that American forces had fired on a Panama-flagged vessel attempting to breach the US blockade of Iranian ports early Tuesday. Iran's newly appointed Supreme National Security Council secretary, Mohsen Rezaei, delivered a harder edge to market volatility by stating the Strait of Hormuz will remain closed until the US changes its behaviour and accepts Iran's conditions to end the war, regardless of any separate arrangement reached through Oman. This explicit statement removes near-term optimism that had been priced into markets.
Shipping data showed traffic through the strait has fallen to roughly six vessels, well below a recent average closer to eleven vessels and a fraction of the 125 to 140 vessels per day that transited before the conflict began. Around one-fifth of global oil supply normally moves through the waterway. The US Energy Information Administration noted that some regional producers are likely to struggle restoring output to pre-conflict levels even by the end of 2027.
The physical market remains far tighter than headline volatility alone would suggest, with traders no longer willing to chase either escalation or de-escalation stories to their logical conclusions. Supply risk broadened beyond the Persian Gulf. In Libya, renewed violence in Zawiya prompted the National Oil Corporation to warn it could declare force majeure if drone attacks on the city's energy assets persist.
In Europe, Ukraine's military said it struck an oil refinery in the Russian city of Orsk, adding to a series of attacks on Russian energy infrastructure that, combined with the Iran war, has helped push Brent up around forty-four percent so far this year. Attention now shifts to inventory data, with the American Petroleum Institute reporting Tuesday and the EIA on Wednesday. Analysts expect a modest draw of around half a million barrels for the week to August 7, which would mark just the second drawdown in three weeks.
Beyond oil-specific data, Wednesday's US Consumer Price Index print looms as a major test for the broader market, with the inflation trajectory likely to shape how much further room the Federal Reserve has to manoeuvre against a backdrop of an already tightly balanced physical crude market.
Source: investinglive.com