Oil futures slid in Asian trade on Thursday as fresh, weaker demand projections from major industry agencies eclipsed continued uncertainty over supply in West Asia.
By 22:07 ET (02:07 GMT), Brent futures were down 1.15% at $87.96 a barrel, while West Texas Intermediate futures fell 1.2% to $82.24 a barrel. The drops followed a choppy session on Wednesday, when mixed signals from Washington and Tehran about control of the Strait of Hormuz drove sharp intraday swings in crude markets.
Demand forecasts cut
Both the Organization of Petroleum Exporting Countries and the International Energy Agency reduced their outlooks for oil demand in reports released on Wednesday. OPEC lowered its global oil demand growth forecast for 2026 to 580,000 barrels per day - its fourth cut so far this year. The IEA cautioned that oil demand would fall by 1.6 million barrels per day this year, a marked revision from its prior projection that had pointed to growth of 1 million barrels per day.
Each agency cited concerns about cooling economic growth, constrained fuel supplies and rising prices tied to the U.S.-Israeli war on Iran as factors behind their downgrades. Those weaker demand signals weighed on prices despite ongoing supply anxieties.
Supply-side tensions persist
Markets remained sensitive to developments around key maritime chokepoints. The United States and Iran both asserted control of the Strait of Hormuz earlier in the week, contributing to uncertainty about shipping through the narrow passage. Shipping data indicated that regional activity had largely stalled after heightened military action between the U.S. and Iran through late-July and early-August.
Analysts continue to monitor the route closely because, prior to the Iran war, the strait accounted for roughly 20% of global oil consumption in terms of flows. Separately, attacks by Yemen’s Iran-backed Houthi fighters on vessels in the Red Sea and the Bab el-Mandeb Strait have heightened market concern about additional disruptions to oil transport from the region.
Inventories and reserves
Price pressure was compounded by U.S. data showing a surprise 17.4 million-barrel build in commercial oil inventories last week. That upside surprise contrasted with separate data indicating a notable contraction in the United States Strategic Petroleum Reserve, creating a mixed signal for traders assessing near-term supply balances.
With weaker demand projections from both OPEC and the IEA and ongoing geopolitical risks around vital shipping routes, oil markets entered the session balancing softer consumption prospects against the possibility of fresh supply shocks. For now, the downgrades to medium-term demand appear to be the dominant influence on prices.