WTI Ends Week 9.7% Higher After US-Iran Strikes Paralyse Strait of Hormuz Traffic
Friday's lull in fighting left WTI little changed on the day but could not undo a week in which Hormuz traffic collapsed and US inventory draws far exceeded expectations.
NYMEX WTI crude for October delivery edged up 0.2% to settle at $91.48 a barrel on Friday (2026-09-04), a muted close that belied seven months of escalating US-Iran military exchanges and a week in which crude prices lurched sharply before steadying.4
The weekly reading was considerably less quiet. WTI finished 9.7% higher over the week of August 31 (2026-08-31) as a US bombing campaign and Iran's retaliatory strikes on American bases kept shipping through the Strait of Hormuz severely disrupted, complicating any restoration of normal supply flows. ICE Brent for November settlement edged 0.8% higher on Friday (2026-09-04) to settle at $96.28 a barrel.4
The most contested figure in the market during the week of August 31 (2026-08-31) was Hormuz traffic itself. President Trump said via social media that about 18 million barrels a day are moving through the strait, only just below prewar levels. Traders put the number at 6 million to 8 million barrels a day as of August 27 (2026-08-27). Strait vessel traffic has plunged to 4 ships a day, Herald Corp reported, a figure that aligns with trader estimates and points to the gap between the official characterisation and what physical flows indicate.2,1
Inventory data released mid-week reinforced the supply-tightness case. EIA figures showed US crude stockpiles at 424.5 million barrels as of Friday (2026-08-28), a draw of 4.45 million barrels — more than four times the 1.1 million-barrel decline analysts had forecast.1
But Thursday's (2026-09-03) session offered a counterpoint. Saudi Arabia priced its flagship crude with a smaller-than-expected hike, tempering some upward momentum, and NYMEX WTI for October settled at $91.30 that day, up 0.3%. Early signs of Russia-Ukraine diplomatic progress also chipped away at the broader geopolitical support on Friday (2026-09-04), contributing to crude's restrained close.2,4
Iraq's export data added another variable. Two Iraqi energy officials said on Wednesday (2026-09-02) that the country's August exports rose to about 2.34 million barrels per day from roughly 1.35 million bpd in July. That near-million-barrel-a-day jump suggests Baghdad has been redirecting crude through alternative routes as Hormuz constraints tighten, though whether such volumes can offset the strait's throughput loss at scale remains unclear.3
Iran's ability to sustain the conflict is being tested economically as well as militarily. Three senior Iranian sources said that the US campaign to throttle Iran's economy through oil export blockades and sanctions enforcement is growing increasingly difficult to withstand. That assessment sharpens the range of possible outcomes — escalation or eventual settlement — with materially different price implications for each path.3
"It's the sum of all fears," Arne Lohmann Rasmussen, chief analyst at Global Risk Management in Copenhagen, said of the market backdrop.2
Still, US diesel prices hit a record high during the week of August 31 (2026-08-31), according to Baird Maritime, showing that the cost of Hormuz disruption has moved beyond futures screens and into consumer fuel prices.3
The counterargument runs through storage. US crude stockpiles at 424.5 million barrels remain historically large in absolute terms, and any de-escalation could quickly erode the week's gains. The bearish storage signal has so far been overwhelmed by active military exchanges, but it is the clearest downside scenario if diplomatic contact accelerates.1
South Korea has begun preparations to potentially send naval support to the region, Rigzone reported on Friday (2026-09-04). If deployed, that would widen international military involvement and introduce a new dimension for tanker operators and war-risk insurers already navigating the most constrained shipping window the Hormuz corridor has seen in months.4