September WTI crude fell to $84.12 late Thursday, down $6.35, or 7.02%, for the week, after a diplomatic push to reopen the Strait of Hormuz collapsed into fresh strikes between Iran and U.S.-Saudi forces. Tanker traffic through the strait stays severely depressed even as one Qatari LNG carrier crossed with Iran's permission, while U.S. crude stocks and the Strategic Petroleum Reserve keep shrinking.
September WTI crude oil futures traded at $84.12 late Thursday, down $6.35, or 7.02%, for the week, with Friday's session still ahead and the weekly result not yet final. The week featured a selloff on hopes of a Hormuz fix, then a partial rebound once fighting resumed.
A diplomatic opening collapses fast
Washington opened the week by pausing strikes, and Oman put forward a proposal for regional management of the strait. That gave traders something concrete to sell: if the route reopened under a Tehran-Gulf deal, the disruption would look temporary, not lasting, and WTI came under heavy pressure.
The trade broke down quickly. Iran rejected the Oman plan and launched missiles at U.S. forces, and the United States and Saudi Arabia struck Iran-backed groups in Iraq. U.S. Central Command then hit Revolutionary Guard targets inside Iran early Thursday. The geopolitical risk premium returned, but it has not recovered all the ground lost earlier in the week — which is why WTI still sits sharply lower even with the war back at the center of the trade.
Tanker traffic, not diplomacy, still sets the supply story
One Qatari LNG tanker, Al Areesh, crossed the strait this week with Iran's permission. But shipping runs on repeatable traffic, not single clearances: the seven-day average of tanker calls through the strait remains severely depressed, and security concerns still limit Red Sea routes. Until that average recovers and holds, every diplomatic report will carry a heavy burden of proof.
The domestic cushion keeps shrinking
The EIA reported U.S. commercial crude stocks fell 7.2 million barrels to 404.5 million barrels in the week ended July 24, about 7% below the five-year average. Cushing stocks dropped to 18.6 million barrels. Refinery utilization climbed to 97.2%.
Separately, the Strategic Petroleum Reserve fell to 307.7 million barrels, its lowest level since 1983. Emergency barrels are buying time, but each release narrows the buffer available if the conflict drags into a longer supply problem.
Technical levels split bulls and bears
Weekly charts put the September WTI crude oil futures contract in a critical retracement zone at $81.21 to $84.53, which could develop into new support. A longer-term retracement zone at $75.40 to $70.70 and the 52-week moving average at $68.98 sit below that, with the main bottom at $67.12 controlling the downside.
A sustained move above $81.21 would point to fresh buying rather than short-covering, opening the path toward the May and July swing tops at $93.50 and $95.30 and, beyond that, the psychological $100.00 level. A sustained close under $81.21 would instead signal sellers back in control, with the first stop at the $75.40-$70.70 zone.
Source: OilPrice.com
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