Oil prices steady as U.S.-Iran war, Hormuz risks keep market on edge

August 20, 2026 (MLN): Oil prices held firm in early Asian trade on Thursday, with investors closely monitoring developments in the U.S.-Iran war and uncertainty surrounding the security of shipping through the Strait of Hormuz.

Currently, Brent crude futures is up, 0.22%, at $91.69 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is down by $0.24, or 0.28%, to $84.35 per barrel by [10:30 am] PST.

Both major benchmarks extended their gains for a fourth consecutive session on Wednesday, settling at their highest levels since July 24. The September contract for WTI crude is also set to expire later on Thursday.

The market continued to draw support from sporadic attacks across the Middle East, although the absence of a major escalation limited further upside.

“Oil prices remained elevated as the market is supported by sporadic attacks in the Middle East but lacks fresh momentum without a major escalation,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, as reported by CNBC.

He added that prices could continue to move gradually higher amid uncertainty surrounding potential peace talks and rising tensions involving the United Arab Emirates, Oman and Iran.

Attention has also turned to relations between the UAE and Iran after the UAE suspended all financial and economic transactions with Iran until further notice, adding another layer of uncertainty to the regional outlook.

Meanwhile, conflicting statements over the status of the Strait of Hormuz continued to cloud the market. U.S. President Donald Trump said on Tuesday that no negotiations were underway with Iran and that the key shipping route was open, while Iran maintained that the waterway remained closed.

Shipping activity through the Strait slowed on Wednesday, with many shipowners continuing to avoid the vital passage amid a lack of clarity over when the blockade imposed during the Iran war could be lifted.

On the supply side, U.S. crude inventories increased by 4.4 million barrels in the week ended August 14, according to the Energy Information Administration, sharply contrasting with market expectations for a draw of around 600,000 barrels. Gasoline inventories also rose, while distillate stockpiles declined.

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