Oil prices rise as Strait of Hormuz shutdown stokes supply fears

Oil prices edged higher on August 12, 2026, as the Strait of Hormuz—a critical chokepoint for global oil shipments—remained effectively shut down amid ongoing fighting in Iran. Brent crude, the international benchmark, rose 0.19% to $89.08 per barrel, while U.S. benchmark crude increased 0.4% to $83.53. The disruption has driven U.S. gasoline prices up 2 cents overnight to a national average of $4.04 per gallon, marking a 16-cent increase from the same time last month and pushing the average back above $4 per gallon for the third time in 2026—a new record. The shutdown of the Strait, through which roughly one-fifth of the world’s oil supply passes, has intensified concerns over regional stability after an attack by Iran-backed Houthi rebels on a vessel in the Bab el-Mandeb strait at Yemen’s southern tip threatened another key shipping route. The renewed hostilities between the U.S. and Iran have led analysts to warn that long-term reductions in shipping through the Strait of Hormuz are now the most likely scenario. Treasury yields have surged in response to higher oil prices and inflation worries, pushing long-term mortgage rates to their highest levels in a year. The Federal Reserve is closely monitoring rising costs amid expectations that July inflation data, due later on August 12, could show a slight decline to 3.4% from 3.5% in June. Cooler inflation could ease pressure on the Fed to raise interest rates, which would otherwise curb inflation but also increase borrowing costs for households and businesses, potentially dragging on the broader economy. Meanwhile, U.S. stock futures showed modest gains, with the S&P 500 up 0.3%, the Dow Jones Industrial Average up 0.1%, and the Nasdaq gaining 0.7%. In corporate news, cloud computing firm CoreWeave surged over 18% and Super Micro Computer jumped nearly 9% on strong quarterly earnings, boosting shares of AI infrastructure companies like Coherent Corp., Lumentum Holdings, and Marvell Technology. In early European trading, Germany’s DAX rose 0.47% to 26,514.56, while France’s CAC 40 fell 0.12% to 8,705.08. Asian markets were mixed. The U.S. dollar slipped slightly against the Japanese yen to 159.16, while the euro traded at $1.1537.