Oil prices recover after a two-day dip as geopolitical tensions in key energy transit routes tighten supply outlooks.
West Texas Intermediate crude futures rose 0.4% to $81.40 in early European trading, reversing recent losses. The gain follows heightened concerns over restricted energy supply routes in the Middle East, particularly the Strait of Hormuz and Bab al-Mandab Strait, which handle 27% of global oil flows.
Daily vessel transits through Hormuz averaged 12 in August, down sharply from pre-war levels of 130-140 ships. Analysts cite fundamental tightness in crude and product markets as a driver for potential further upside, despite short-term volatility. OPEC trimmed its 2026 global oil demand forecast to 580,000 barrels per day from 780,000 bpd.
Iran and Oman are in talks to manage Hormuz navigation collectively, though Tehran denies discussions with the U.S. about reopening the strait.