Oil closed mixed as surprise US inventory build dampens Hormuz reopening hopes

Global crude benchmarks ended mixed on Wednesday, stalling a severe two-day sell-off as an unexpected build in US inventories countered cautious optimism over a diplomatic resolution in the Strait of Hormuz.

International Brent crude edged up 9 cents, or 0.11%, to settle at $79.45 a barrel. US West Texas Intermediate (WTI) fell 55 cents, or 0.73%, to finish at $75.22 a barrel.

Pricing direction remained tangled in conflicting geopolitical signals. US President Donald Trump claimed positive negotiations with Tehran were actively underway, while Iran flatly denied any ongoing peace talks. However, Iran’s Foreign Ministry confirmed an Oman-brokered understanding to manage the Strait of Hormuz is being finalized. The potential reopening of a waterway that historically handles 20% of global oil flows restrained bullish positions, despite widespread market skepticism regarding the durability of any diplomatic agreement.

Downward pressure on the US benchmark was amplified by bearish domestic supply metrics. The US Energy Information Administration (EIA) reported a surprise crude inventory build of 2.5 million barrels to 407 million barrels, defying market forecasts of a 1.5 million-barrel draw. WTI faced compounded headwinds from an unexpected stockpile rise at the Cushing, Oklahoma, delivery hub as domestic refiners eased processing rates.

Further downside was strictly capped by escalating physical supply disruptions outside the Gulf. In the Red Sea, Houthi militants attacked a Saudi oil tanker off the export port of Yanbu. Meanwhile, Black Sea commodity flows remain severely constrained by attacks on regional infrastructure, forcing repeated operational suspensions along the Caspian Pipeline Consortium, a primary route for Kazakh crude. Downstream, baseline demand found marginal support after China relaxed fuel export controls for August.

Written by: Aiman Haikal