Brent holds above $89 as US-Iran deal doubts revive supply fears

Brent futures reached $89.66 a barrel by 0553 GMT, up 75 cents on the session, while US West Texas Intermediate (WTI) crude gained 72 cents, or 0.87%, to $83.92. Both contracts had climbed more than $1 earlier in the day before easing back. That followed Tuesday's gains of over $1 each, which marked the highest closing prices since 31 July, and a roughly 5% surge on Monday as optimism for a deal faded.

The move traces to renewed doubt over a US-Iran settlement. Reuters reported that President Trump made a new demand for compensation over past conflicts, and that both the US and Yemen's Iran-aligned Houthis reported separate shipping attacks in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday. Iran's chief security official, Mohsen Rezaei, said the Strait of Hormuz would stay closed unless Washington accepted Iran's terms, including the release of frozen assets.

The chart below shows Brent over recent months, against which the latest move above $89 can be read.

What this means for UK buyers

The direct read-across to UK commercial contracts is limited: Brent is a crude benchmark, and your gas and power costs track NBP and baseload rather than oil. The indirect channel matters more. Sustained Middle East tension firms sentiment across the wider energy complex and can steepen forward curves, which affects fixed-price renewal quotes even when the underlying commodity is gas.

Watch these points as the story develops:

• Brent front-month, currently $89.66, and whether it holds above $89
• Strait of Hormuz vessel traffic, down to eight ships on Tuesday against a normal 125 to 140
• The US Energy Information Administration (EIA) inventory report due 1430 GMT
• Any confirmation of the American Petroleum Institute figure showing a 9.1 million barrel crude build
• Further shipping incidents in the Bab el-Mandeb Strait

Supply data cuts the other way. Market sources citing American Petroleum Institute figures reported US crude inventories rose about 9.1 million barrels in the week ending 7 August, with gasoline and distillate stocks falling. Haitong Futures noted that if the EIA confirms the build, it could ease concerns about tightness. The EIA also expects Middle Eastern crude disruptions of around 600,000 barrels per day to persist through the end of 2027.

The BBC has separately reported that oil prices fell and shares jumped on an earlier US-Iran deal announcement, underlining how quickly the narrative swings. For buyers weighing a fixed renewal, the near-term signal is volatility rather than a clear direction: the EIA inventory release and the next round of diplomatic messaging will set the tone into the weekend.