Oil rallies as stocks fall

What's happened

Oil prices have risen this week after U.S. officials narrowed a waiver to the Jones Act for energy shipments and data showed U.S. crude stocks have fallen to multi-decade lows. Traders are parsing mixed statements from Washington and Tehran about talks to reopen the Strait of Hormuz while reparations demands have emerged, keeping markets volatile on 11 Aug 2026.

What's behind the headline?

What is driving the move

• U.S. crude inventories have fallen to their lowest level in more than 40 years, which is tightening immediate supply and is supporting higher oil prices.
• The Trump administration has extended a Jones Act waiver but narrowed it to vessels carrying specific energy cargoes; that is increasing flexibility for some shipments while leaving broader transport constraints in place.

How rhetoric is shaping markets

• Traders are reacting to mixed statements from Washington and Tehran about negotiations to reopen the Strait of Hormuz. Conflicting claims over reparations and negotiation timing are keeping risk premia elevated and causing sharp price swings.

Market consequences

• Higher crude will increase pressure on gasoline and diesel prices and will push energy stocks higher in the near term; bond yields and inflation expectations will respond when moves are sustained.

Outlook

• If talks produce a credible reopening of Hormuz and sustained transit resumes, prices will fall. If talks stall or attacks continue, prices will rise further and could test prior highs above $100 a barrel.

Forecast

• Expect continued headline-driven volatility: prices will move quickly on claims about Hormuz transits, U.S. stock draws, or fresh maritime attacks. Physical shipping flows will recover slowly even if diplomacy advances.

How we got here

Fighting between the U.S. and Iran and Houthi attacks have disrupted routes through the Strait of Hormuz and Bab el-Mandeb. Markets have swung between spikes above $100 and falls into the $70–$90 range as ceasefire hopes and fresh hostilities trade places, squeezing global supply and driving refinery and fuel-price pressure.

Our analysis

CNBC reports that U.S. West Texas Intermediate futures were 2.7% higher at $84.36 a barrel at 4:30 a.m. ET on 11 Aug and that the administration has extended and narrowed a Jones Act waiver for energy shipments, noting U.S. crude stockpiles have fallen to the lowest level in more than four decades. Al Jazeera and multiple outlets tracked the earlier swings: Al Jazeera quoted SEB Research saying trading between $80–$85 reflects hope for a solution, while The Guardian and Arab News documented the pattern of sharp rallies when hostilities resume and falls when strikes pause. The Guardian has emphasised the risk from Houthi actions through the Red Sea and the Bab el-Mandeb route, warning that alternate routes and OPEC+ policy have not erased vulnerability. CNBC and Business Insider detailed how pauses in strikes and statements from Mr Trump have repeatedly pulled risk premia lower, but both noted that scepticism from Tehran or continued attacks quickly reverse that relief. Together the reporting shows markets are reacting to a mix of physical supply pressure (stock draws, disrupted routes) and headline politics (waivers, negotiating claims, reparations demands) rather than to a clear, sustained improvement in flows.

Go deeper

• How will lower U.S. crude stocks affect pump prices in the coming weeks?
• What exactly does the narrowed Jones Act waiver allow and who will benefit?
• Which shipping routes are likely to reopen first if diplomacy succeeds?

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