Oil prices declined on Friday, August 28, 2026, with both major benchmarks tracking toward weekly losses as traders balanced the resumption of crude flows through the Strait of Hormuz against the lack of progress in U.S.-Iran negotiations. Brent crude futures fell 52 cents, or 0.6%, to $89.18 per barrel at 1419 GMT, while West Texas Intermediate crude futures dropped $1.01, or 1.2%, to $82.52. Both benchmarks were positioned to end the week in negative territory, with Brent declining approximately 5.5% and WTI falling 5.2% for the week.
According to Rystad Energy analyst Janiv Shah, the market had been surprised by the emergence of additional oil flows through an Iran-Oman shipping corridor and U.S. mine clearance claims in the region. Shah noted that the weekly decline was likely attributable to the available volume exiting the Strait and the pace at which flows were ramping up, which would allow Asian refiners to increase crude purchases and consumption. The U.S. imposed what it characterized as the "toughest sanctions in history" against Iran earlier in the week.
Tehran responded by denouncing the sanctions as an "inhumane and hostile act" that had proven ineffective. Mediators are intensifying diplomatic efforts to reopen the Strait of Hormuz, with Tehran agreeing to develop a list of conditions for restoring normal navigation after a Qatari envoy pressed Iran to respect freedom of navigation principles. Commodity vessel transits through the Strait of Hormuz remained volatile, however.
Preliminary shipping data indicated that seven commodity vessels transited on Thursday, down from 17 the previous day and below the 10-day average of 15 vessels. At the Bab el-Mandeb, another critical maritime chokepoint, 17 commodity vessels passed through, with six entering and 11 exiting. Goldman Sachs estimated on Thursday that recent total Gulf exports stood at 15 million to 16 million barrels per day, representing a decrease of 7 million to 8 million bpd compared to pre-war levels but an improvement of 5 million to 6 million bpd from the lowest point recorded in March.
John Evans, analyst at PVM Oil Futures, highlighted the broader implications of the disruption, stating that consequences affecting OPEC membership changes, Chinese demand dynamics, and global refinery capacity solutions remain inextricably linked to the volatile situation. Beyond Iran-related developments, the Trump administration is pursuing negotiations to secure long-term access to a portion of Venezuela's crude reserves, according to sources familiar with the discussions. Such an arrangement could potentially reduce U.S. oil import costs.
Bloomberg reported that Venezuela is also considering withdrawal from the OPEC oil production group. Geopolitical tensions escalated following Moscow's warning that it could strike British military targets both within and outside Ukraine in response to Kyiv's use of British-supplied long-range cruise missiles against Russian territory. President Trump stated that Russian President Vladimir Putin would not attack a NATO member, downplaying reports that CIA Director John Ratcliffe had warned Russian officials against such action.
Ukraine's military conducted overnight strikes on a Russian oil refinery located in the Yaroslavl region, according to the Ukrainian General Staff. Source: Oil & Gas 360, Investing.com
Source: oilandgas360.com