API Reports Smaller-Than-Expected Crude Draw as Markets Monitor Hormuz Tensions

The American Petroleum Institute (API) reported that U.S. crude oil inventories declined by 56,000 barrels last week, significantly below analysts' expectations for a 2.7 million-barrel draw. Under normal market conditions, a smaller-than-expected inventory decline would typically be viewed as indicating softer market conditions. However, recent geopolitical developments have remained a key focus for energy markets.

API inventory data

1. Latest week: -56,000 barrels (forecast: -2.7 million barrels)
2. Previous week: -399,000 barrels
3. The latest figures marked a second consecutive week of inventory declines that were smaller than market expectations.

Market developments

WTI crude traded around US$79.57–80.58 per barrel during July 14–15, while Brent crude remained above US$85 per barrel, following heightened geopolitical tensions involving the United States and Iran.

The United States announced additional measures affecting Iranian shipping in the Strait of Hormuz, while recent military developments in the region have contributed to increased market uncertainty. According to the U.S. Energy Information Administration (EIA), approximately 8.5 million barrels of oil still transited the Strait of Hormuz on Sunday despite ongoing tensions, although shipping activity has reportedly slowed as some tanker operators reassessed security risks.

Separately, OPEC lowered its 2026 global oil demand growth forecast to 800,000 barrels per day.

Market context

Market participants continue to assess both inventory data and geopolitical developments. During periods of elevated geopolitical uncertainty, changes in supply security may receive greater market attention than weekly inventory figures alone.

Market focus

Investors are awaiting the official weekly petroleum status report from the U.S. Energy Information Administration, which may provide additional insight into U.S. crude inventories. Market participants are also monitoring shipping activity through the Strait of Hormuz and broader regional developments that could influence energy markets.