TLDR
- Brent crude settled at $89.31 a barrel, down 0.43%, while WTI finished at $83.40, down 0.16%
- Both benchmarks fell more than 4-5% for the week
- New Fed Chairman Kevin Warsh hinted at a possible rate hike later this year to fight inflation
- Rumors of a potential deal to reopen the Strait of Hormuz put downward pressure on prices
- Oil flows through the strait remain choppy, with only seven vessels transiting on Thursday versus 17 the day before
Oil prices ended Friday lower, capping a tough week for crude markets as traders weighed signals from the Federal Reserve and growing talk of a deal to reopen the Strait of Hormuz.
Brent crude settled at $89.31 a barrel, falling 39 cents or 0.43%. West Texas Intermediate finished at $83.40 a barrel, down 13 cents or 0.16%. For the week, Brent dropped more than 5% and WTI fell more than 4%.
Fed Rate Hike Fears Add Pressure
New Federal Reserve Chairman Kevin Warsh signaled a possible interest rate hike later this year to bring inflation under control. That news pushed oil prices lower, according to Phil Flynn, senior analyst at the Price Futures Group.
FED WARSH AT JACKSON HOLE (Summary):
On policy:
• He gave no timetable for a rate hike and said the speech should not be viewed as forward guidance or a formal reaction function
• Short-term interest rates remain the Fed’s main policy tool
• A “good majority” at the July… pic.twitter.com/pUZUOUa0Lj
— Wall St Engine (@wallstengine) August 28, 2026
Higher interest rates tend to slow economic growth, which can reduce demand for oil.
Flynn noted that global product markets looked strong following Ukrainian strikes on Russian refineries. But he said rumors of a weekend deal to reopen the Strait of Hormuz were weighing on prices.
The U.S.-Israeli conflict with Iran reached its six-month mark on Friday. Before the war, around 20% of global oil supply moved through the Strait of Hormuz.
Oil flows through the strait have made a choppy recovery. On Thursday, just seven commodity vessels transited, down from 17 the day before and below the 10-day average of 15.
Goldman Sachs estimated total Gulf exports at around 15 to 16 million barrels per day. That is 7 to 8 million barrels below pre-war levels but 5 to 6 million above the low point reached in March.
Hormuz Deal Talks Pick Up
Mediators are pushing hard to get the strait reopened. Tehran agreed to draw up a list of conditions to restore normal shipping after a Qatari envoy pressed Iranian officials on freedom of navigation.
⚡️UPDATE: 🇮🇷 Iran spells out its terms for reopening the Strait of Hormuz.
President Pezeshkian says the route agreed with Oman can open "based on the map that was agreed," once the US fulfills its June ceasefire commitments:
Lifting the naval blockade and sanctions
Releasing… https://t.co/6VbIV6yvAY pic.twitter.com/3d6eiHHwSE— Coin Bureau (@coinbureau) August 28, 2026
The U.S. this week announced what it described as the toughest sanctions in history on Iran. Iran called the measures inhumane and said they had lost their effect.
Rising U.S. crude inventories also added bearish pressure. The Energy Information Administration reported a 95,000 barrel increase in crude stocks. That marked a fourth straight weekly rise.
Venezuela Talks Add New Variable
The Trump administration is working on a deal to secure long-term access to a portion of Venezuela’s crude oil reserves. If successful, this could lower U.S. oil import costs.
Venezuela is also reportedly considering leaving the OPEC oil production group, according to Bloomberg.
Separately, Ukraine struck a Russian oil refinery in the Yaroslavl region overnight. Moscow warned it could target British military assets in response to Ukrainian attacks using British-supplied missiles.
President Trump said Russian President Vladimir Putin would not attack a NATO country.
Rystad analyst Janiv Shah said markets have been surprised by additional oil flow through an Iran-Oman shipping corridor and U.S. mine clearance efforts. He said the pace of recovery will determine how much Asian refiners can absorb.
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