The Iran war has intensified with Iran adding 77 vessels to its blacklist of ships that have breached navigation rules for the Strait of Hormuz, raising the prospect of tighter restrictions on vessels seeking to pass through the strategic waterway. The Persian Gulf Strait Authority warned that ships on the revised blacklist could be barred from future passage and subjected to measures ranging from financial penalties to detention or seizure, according to its latest notice. This escalation comes as the International Energy Agency (IEA) has deepened its estimates for this year's decline in global oil demand by 940,000 barrels a day to 2.5 million barrels a day, warning that consumption may have to decline further as the Iran war drags on. The Paris-based agency said global oil inventories have been drawing at record rates and with supplies still constrained, further demand reductions may be required in the coming months to close the gap.
The conflict has intensified with Iran attacking 10 ships near the Strait of Hormuz and the U.S. sinking five Iranian oil tankers in a sharp escalation of the six-month-old war. The flow of oil from the Strait of Hormuz, which facilitated about one-fifth of the global crude-oil movement before the war, has been severely disrupted. Oil flows through the waterway have reportedly dropped to around one-fourth of pre-war levels after tanker strikes this week, according to latest reports. Meanwhile, the attacks on Saudi energy facilities by the Iranian-backed Houthis threaten oil shipments on the Red Sea, which has been a key alternative route to the Strait of Hormuz path. Six commodity vessels passed through the strait on Tuesday, down from nine a day earlier and below the 10-day average of about 12, according to preliminary Kpler shipping data. In the week before a resumption in fighting on August 30, roughly 8 million to 9 million barrels per day had flowed through Hormuz, double the previous week's volume, according to Rystad Energy's chief economist Claudio Galimberti, with flows now falling below 2 million bpd.
Supply concerns have been further compounded by a steep decline in Saudi Arabia's oil production. Saudi Arabia reported to OPEC that it produced 6.2 million barrels per day in August, the lowest monthly output recorded in 2026 and 23% below July levels, according to an OPEC report published on Thursday. The decline came after Iran-backed Houthi rebels in Yemen threatened oil shipments from Saudi Arabia's west coast. The Houthis' involvement in the wider Middle East conflict has also affected Saudi Arabia's main alternative route for exporting crude without sending shipments through the Strait of Hormuz. Strong Chinese buying and a sharp decline in Saudi Arabia's oil output have added further support to prices, as reported by ET Now.
The IEA has revised its global supply and demand projections significantly. The agency lowered projections for global supply by 1.3 million barrels a day, to an annual loss of 5.7 million a day, pushing back expectations for a recovery into next year. World supplies are on track to fall short of demand this year by about 1.75 million barrels a day, with the agency's latest data indicating an average global oil deficit of about 1.7 million barrels a day this year, compared with a shortfall of 1.3 million a day in last month's report. Between February and August, inventories declined at an even more stark clip of 2.8 million barrels a day, the IEA said. The return of a supply surplus will now be delayed until 2027, according to the agency's latest forecast.
Crude oil on the domestic futures market also opened higher on Thursday, with MCX crude trading around ₹9,140, gaining 0.45%. According to market experts, the contract was testing the ₹9,150-₹9,200 resistance area after an extended rally. A sustained move above ₹9,200 could take prices towards ₹9,350-₹9,400, analysts said, while immediate support is placed at ₹9,000-₹8,950, followed by ₹8,800-₹8,750. The MCX crude RSI was around 71, reflecting strong momentum but also suggesting that prices could see some near-term consolidation or pullback. WTI was trading above $96 a barrel after retreating from levels close to $98, with analysts identifying $98 as an important level for the US benchmark. A sustained break above this point could lead prices towards $100, while support is seen at $95-$94, followed by $92-$91.
