Oil prices slipped during Asian trading on Thursday, pressured by downward revisions to 2026 demand outlooks from both OPEC and the International Energy Agency (IEA), despite an ongoing impasse in U.S.-Iran negotiations and continued shipping risks in the Middle East.

Brent crude dropped 0.5% to $88.56 per barrel, falling below the $89 mark after touching an intraday high above $89 on Wednesday. The decline reflected mounting demand concerns and a bearish U.S. inventory report. The American benchmark, WTI crude, traded 0.60% lower at $82.77 in the Asian session.

On Wednesday, both OPEC and the IEA lowered their 2026 oil demand forecasts, citing the continued closure of the Strait of Hormuz. The waterway normally carries roughly a fifth of global oil trade, making its disruption one of the most consequential supply-chain shocks available to the market. That both a producer group and a consumer-focused agency cut their outlooks on the same factor underscores how widely the shipping disruption is expected to weigh on consumption through elevated prices and reduced product availability.

In its August monthly report, the IEA projected that oil demand would slump by 1.6 million barrels per day (bpd) this year. That figure represents a 510,000 bpd downward revision from the July report, which had assumed that Strait of Hormuz oil flows would gradually recover. The renewed hostilities at the end of July and the deadlock in U.S.-Iran talks led the agency to forecast significantly larger demand destruction driven by prices higher than those anticipated in early July.

OPEC also trimmed its 2026 demand forecast on Wednesday. Unlike the IEA, the cartel still anticipates demand growth, but cut its outlook to 580,000 bpd, down from the 780,000 bpd expansion projected in the July report. The split between the two organizations reflects their historically different methodologies and assumptions about economic growth and price elasticity, though both now agree the Hormuz disruption is a material drag on consumption.

Further pressuring prices, U.S. crude oil inventories posted a surprise build of 17.4 million barrels during the week ending August 7, according to data released Wednesday by the U.S. Energy Information Administration (EIA). The increase brought commercial stockpiles to 424.4 million barrels, placing them just 2% below the five-year average for this time of year.

The substantial inventory build was driven primarily by a 1.14 million bpd week-on-week rise in crude oil imports, while crude exports fell by 627,000 bpd during the same period. The divergence between rising imports and falling exports suggests U.S. refiners may be taking advantage of redirected cargoes as shippers avoid the Hormuz route.

By Tsvetana Paraskova for Oilprice.com