August saw oil markets remain firmly focused on the ongoing US-Iran standoff, although the month was characterised by a gradual reduction in crude prices from the highs seen in July. Brent began August at $88/bbl before falling sharply towards $79/bbl as renewed diplomatic efforts raised hopes that the Strait of Hormuz could reopen. However, with negotiations repeatedly stalling and tanker traffic remaining severely restricted, prices recovered through the middle of the month, reaching almost $92/bbl before easing back towards $87/bbl at month-end.

Refined product markets remained considerably tighter than crude markets. US distillate inventories fell to 105.62 million barrels, 9% below the same period in 2025, while ARA gasoline inventories reached a five-year low. Total ARA refined product stocks were around 24% below year-ago levels and approximately one-third below the five-year average. Diesel markets remained particularly strong, although margins began to ease towards the end of the month as expectations of additional Russian diesel exports increased.

Jet fuel markets showed some signs of improvement as the peak summer travel season began to fade. ARA jet fuel stocks rose 10% during the week to 20 August to 605,000 tonnes, their highest level since early April, although inventories remained 36% below the previous year. The improvement in jet fuel availability helped ease margins, while stronger westbound arbitrage flows provided additional supply into Northwest Europe.