Oil Price Today (August 19): Crude oil nears $92/barrel as Trump claims US in no talks with Iran. What lies ahead?

Oil prices neared $92 per barrel in early trade on Wednesday as tensions continued to flare up in the Middle East, with US President Donald Trump asserting that the US is engaged in no talks with Iran, further stoking supply worries even as he insisted that the Strait of Hormuz was open for traffic.

Brent crude futures rose 57 cents, or 0.6 per cent, to $91.59, while US West Texas Intermediate crude futures jumped 62 cents to $85.56 a barrel, extending gains. Both benchmarks gained more than 5 per cent last week after attacks on tankers operated by Abu Dhabi National Oil Company in the Strait of Hormuz and an attack on a Saudi Aramco refinery.

A temporary ceasefire agreement between Iran and the US expired on Monday. A senior Iranian official meanwhile told Reuters that the country was moving to a "fully offensive" military posture due to the diplomatic stalemate, though there were no reports of fresh strikes by either side on Tuesday.


As Trump continued to assert his control over the Strait of Hormuz through an AI-generated image depicting the strategic waterway as "NEW US Territory", Iran hit back at the US President, warning that his claims would be "corrected", while labelling his claims as delusions.

Iran calls Trump delusional

Describing Trump as a “deluded man”, Iranian Deputy Foreign Minister Kazem Gharibabadi said on Tuesday that while Trump had correctly referred to the "eternal Persian Gulf", his claims over the Strait of Hormuz would soon be corrected, either by circumstances or by Iran itself.

"Just as Trump correctly wrote the name of the eternal Persian Gulf, soon his delusion regarding the Strait of Hormuz will either be corrected or we will correct the delusions of this deluded man," Gharibabadi said in a post on X.

Meanwhile, Trump told reporters that the Strait was open, and oil prices were falling, while warning that Iran was facing severe economic and military pressure. "I think it's a great idea. I mean, we control it with the blockade. I like the idea of declaring it a territory. We have total control over the Strait," Trump said.

Peace talk hopes and expectations of resumption of oil tanker traffic through the strategic Strait of Hormuz have now nearly been lost as the parties threaten to extend the conflict that the US and Israel launched with attacks on Iran on February 28.

Also read | Oil edges up on uncertainty over exports through Hormuz

What lies ahead?

JPMorgan estimated that every additional month of disruption could add around $7 to $8 a barrel to Brent prices. If the disruption lasts for three months, the bank expects average monthly Brent prices to reach around $114 a barrel.

Goldman Sachs has also warned that Brent could rise to $120 a barrel if shipping disruptions through the Strait of Hormuz, the world's most important oil transit route, continue. At the same time, Goldman Sachs expects tensions in the Middle East to eventually ease under its base case. The Wall Street bank forecasts Brent to average $80 a barrel in the fourth quarter and $75 a barrel next year. It said risks remained tilted to the upside, as disruptions through the Strait of Hormuz and the Red Sea could last longer than expected.

Also read |Indian refiners face crude cost surge as Gulf premiums rise, Russian oil discounts vanish

(With inputs from agencies)

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