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Wednesday, August 26, 2026
What’s happening: Crude oil traded lower this morning, as investors monitored progress in reopening the Strait of Hormuz.
What happened: Iran said that it had resumed talks with Oman about managing the key waterway.
Crude continued a downward trajectory after shedding more than 3% in the previous session, with US dollar strength further weighing on oil prices.
Why it matters: Iran said it had restarted negotiations with Oman over managing the Strait of Hormuz, which was responsible for handling around 20% of global oil and LNG shipments before the war started in February.
The two nations held discussions on a “temporary joint maritime corridor” through the key waterway, while also agreeing to clear mines. Technical talks between Iran and Oman on establishing a permanent corridor are also set to continue, which could cover the future management of the strategic waterway, traffic management and the provision of security services.
On Monday, US President Donald Trump announced sanctions on nations doing business with Iran, to exert economic pressure on Tehran.
Meanwhile, the American Petroleum Institute (API) said that US crude oil inventories grew around 4.2 million barrels in the week ended August 21, more than market estimates of a gain of 1.9 million barrels and following a drawdown of 328,000 barrels in the previous week. US crude production surged to 13.83 million barrels per day (bpd) from 13.805 million bpd.
Oil prices remained under pressure as the latest measures by the US to exert economic pressure on Iran proved less aggressive than what investors were expecting, with Washington refraining from secondary sanctions on Tehran’s trading partners.
Strength in the US dollar exerted further pressure on oil prices this morning as a higher greenback makes commodities more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 98.92 this morning.
Spot price for WTI crude oil fell 1% to $79.92 per barrel this morning, recording losses for the third consecutive session. Spot price for Brent crude declined 0.9% to trade at $85.11 per barrel.
In other commodities trading, gasoline dipped 1.3% to $2.8912, while heating oil lost 1.9% to trade at $4.0605 this morning. Natural gas bucked the trend, with prices rising 1.5% to $2.862.
What to watch: Investors will continue monitoring developments in the talks between Iran and Oman.
Data on the EIA’s (Energy Information Administration) crude oil stocks change (1830 UAE Time) will be released today. US crude inventories, which jumped by 4.405 million barrels to 428.8 million barrels in the week ended August 14, are expected to surge by 1.9 million barrels in the latest week. Analysts expect US gasoline stockpiles to decline by 1 million barrels compared to a gain of 688,000 barrels in the previous week, while distillate stocks are expected to contract by 1.7 million barrels in the latest week.
Context: The Australian dollar hit a 12-week high versus the US dollar this morning following the release of inflation data.
Details: Australia’s monthly CPI climbed 1.0% in July, higher than market estimates of a 0.8% rise. Although annual inflation eased to 3.5% from 3.8%, the figure came in above market expectations of 3.3% and the central bank’s target range of 2%–3%.
The trimmed mean measure of core inflation rose 0.5% in July, more than market estimates of 0.3%, with an annual underlying inflation rate of 3.6%.
The latest reading followed repeated warnings by the Reserve Bank of Australia about inflation remaining elevated.
The RBA has already hiked its benchmark interest rate three times this year to contain inflation. Governor Michele Bullock recently said that another hike was “quite possible.” Investors raised speculations of a rate hike in September.
Data released this morning showed that Australia’s total construction work fell 2.1% to A$82,515.9 million in the second quarter, following 4.3% growth in the previous quarter. The figure was significantly below market estimates of a 0.5% rise.
The Westpac–Melbourne Institute leading economic index came in flat for July compared to a 0.1% rise in the previous month.
Strength in the US dollar weighed on the AUD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 98.92 this morning.
The AUD/USD forex pair gained around 0.3% to 0.7182, reaching a 12-week high. Meanwhile, the S&P/ASX 200 slipped around 0.1% to trade at 9,157.00 this morning.
What to watch: Investors will continue monitoring news related to the US-Iran conflict.
Data on building capital expenditure (0530 UAE Time), household spending (0530 UAE Time) and private capital expenditure (0530 UAE Time) from Australia will be released on Thursday. Private new capital expenditure on buildings and structures, which dipped 3.8% in the first quarter, is expected to fall by 1.8% in the second quarter. Analysts expect household spending in Australia to rise by 0.3% in July following a 0.8% gain in June, while total new capital expenditure in Australia is expected to decline by 1.4% in the second quarter following a 6.5% rise in the previous quarter.
Other Markets: European indices closed mostly higher on Tuesday, with the FTSE 100, DAX 40 and STOXX Europe 600 Index up by 0.29%, 0.61% and 0.35%, respectively, and the CAC 40 down by 0.16%.
A Kremlin adviser said that factories manufacturing drones in the UK for export to Ukraine could face attacks from “unknown sources.” The news sent the USD/RUB pair lower in forex trading this morning.
South Korea’s manufacturing business survey index declined to 81 points in August from 82 in the previous month. This signalling continued weakness in business conditions lent support to the USD/KRW forex pair.
China’s general public budget expenditure climbed 1.3% year-over-year to ¥16.29 trillion during the first seven months of the year, which sent the USD/CNY pair higher in forex trading this morning.
Canada’s wholesale trade fell 0.6% in July compared to a 2.8% gain in June. This being the first decline since January lent support to the USD/CAD forex pair.
Hong Kong’s trade deficit shrank to $4.9 billion in July from $34.1 billion in the year-ago period. However, the USD/HKD pair rose in forex trading this morning.
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