Nonetheless, the market continues to be well-supported by traders casting doubts over a lasting agreement and betting on an eventual supply disruption. This is probably why prices didn’t collapse on Thursday. The immediate probability of military activity may be dampened by the continuing negotiations; however, without some framework to prove they are on the right path, the current risk premium cannot be eliminated from the market.
Strait of Hormuz Fears Keep Floor Under Prices
Despite Thursday’s sharp selloff, crude oil’s major support at $60.79 remains intact, supported by persistent fears about potential supply disruptions through the Strait of Hormuz. This critical waterway handles approximately 20 million barrels per day of oil transport, representing roughly 20% of global consumption.
EIA Inventory Build and IEA Demand Cut Trigger Selloff
With the risk premium intact and little to report from Iran, traders focused on Wednesday’s Energy Information Administration (EIA) report and Thursday’s International Energy Agency (IEA) 2026 forecast.
The EIA reported a huge miss to the upside, with crude oil inventories coming in at 8.5 million barrels versus analyst expectations of just 793,000. The jump in inventories drove U.S. crude stockpiles to 428.8 million barrels. The news highlighted the persistent oversupply situation facing the global oil market.
Initially, the market barely moved on this news. Then came Thursday’s report from the IEA, which showed a downward revision in the forecast for 2026 global oil demand growth.
The IEA’s decision to lower its demand outlook proved to be the catalyst that finally triggered a sharp selloff.
