Oil Under Pressure as Iran and Oman Reach Hormuz Shipping Deal

06 August 2026 — Source: ING

Energy: US Distillate Exports Hit Record Volumes

ICE Brent crude continues to trade below $80/bbl, with markets increasingly focused on the prospects of a US–Iran agreement that would restore energy flows through the Strait of Hormuz. Iran signalled progress on this front, announcing it has reached an agreement with Oman on new shipping arrangements for the strategic waterway. A joint statement on the deal is reportedly being prepared.

Iran has insisted the agreement must proceed without interference from unnamed third parties — phrasing widely interpreted as a reference to the United States. The trajectory of US–Iran negotiations now stands as the decisive factor, as meaningful bilateral progress is considered essential before disrupted energy shipments through the strait can realistically resume. For oil markets, that matters because the Strait of Hormuz is a critical transit route for seaborne crude and refined products, so even incremental diplomatic developments can quickly shift attention toward supply flow risk.

The latest EIA inventory report showed US commercial crude oil inventories rising by 2.48 million barrels over the past week, while the Strategic Petroleum Reserve (SPR) drew down by 2.84 million barrels. On a net basis, total US crude oil inventories fell by a marginal 362,000 barrels. Crude imports climbed by 515,000 b/d week-on-week, and exports grew by 218,000 b/d. Refinery activity edged slightly lower, with utilisation dropping 0.7 percentage points to 96.5%, though it remains at seasonally elevated levels.

Refined product markets tightened further. Gasoline inventories fell by 1.64 million barrels, while distillate inventories declined by 3.47 million barrels. Robust export demand is driving additional tightness in US distillates: exports rose 98,000 b/d week-on-week to a record 1.88 million b/d. On a global scale, middle distillate markets are experiencing significant tightness, compounded by supply disruptions in the Middle East and Russia's export ban on diesel. That combination leaves the market watching not only crude balances, but also the availability of diesel and heating oil, which can be more sensitive to regional shipping disruption and export controls.

Metals: Gold Surges on Hormuz Optimism; Copper Nears Record Highs

Gold rallied more than 4% on Wednesday, and the upward momentum has continued, pushing prices toward $4,300/oz. The rally is underpinned by growing optimism that a US–Iran agreement could ease inflationary pressures, alongside a softer US dollar and rising expectations of lower interest rates. Markets are increasingly pricing in the disinflationary effects of lower energy costs, which has tempered expectations for further Federal Reserve tightening and bolstered the appeal of non-yielding assets such as gold. Sustained investment demand from China has also lent support.

Going forward, gold prices are expected to be guided by developments in US–Iran negotiations and shifts in Federal Reserve policy expectations. While geopolitical risk premiums may continue to recede, a combination of lower oil prices, a weaker dollar, and a potentially more dovish rate environment should remain supportive for bullion.

In the base metals complex, copper extended its gains, with LME copper trading above $14,000/t and Comex futures hovering near record levels. The rally is being driven by the diversion of metal into the United States ahead of potential tariff decisions, tightening availability elsewhere and supporting prices across global exchanges. Broader improvement in Middle East sentiment has also boosted industrial metals, as hopes for the reopening of the Strait of Hormuz have weighed on the dollar and reduced inflation concerns. Aluminium and zinc moved higher alongside copper.

Copper fundamentals remain supportive overall. Tight physical markets, low inventories outside the US, and persistent supply-side challenges are expected to keep prices firm. However, developments in US tariff policy could introduce heightened volatility in the near term.

Agriculture: Cocoa Volatility Persists

London cocoa futures experienced a turbulent session, initially rallying as much as 5% before settling lower. Volatility has intensified in recent months as the market increasingly looks ahead to the upcoming 2026/27 season, which begins in September.

Weather remains a primary concern, particularly in West Africa, and these worries are unlikely to dissipate given prevailing El Niño conditions. Production in Ivory Coast and Ghana — the world's top two cocoa producers — is projected to decline in the 2026/27 season following weak pod development.

The Ghana Cocoa Board previously forecast that the nation's 2026/27 cocoa output could fall to between 450,000 and 550,000 tonnes, down from an estimated 750,000 tonnes in 2025/26. The decline is attributed to the spread of swollen shoot virus, ageing cocoa trees, and potential weather-related disruptions tied to El Niño.

Original source: Hellenic Shipping News / ING