Weekly Market Summary — Aug 28, 2026

Crude Oil

Crude Retreats as Improving Hormuz Flows Ease Supply Fears

Crude prices moved lower this week as improving tanker traffic through the Strait of Hormuz reduced market concerns over tighter Persian Gulf supply. Last week, the Trump administration announced “Economic D-Day” sanctions that proved less severe than expected. The latest sanctions package from Washington included restrictions targeting Iran’s oil-revenue networks and shadow fleet but stopped short of imposing broader secondary penalties on major trading partners like China that could further squeeze global supply.

Iran and Oman continued working toward an arrangement that could facilitate additional tanker traffic through the strait. Even without a formal Hormuz agreement, physical flows through the waterway have been ramping up despite persistent risks to commercial shipping. Bloomberg estimates roughly 6–8 MMBbl/d of crude is now moving through the waterway, still well below prewar levels but materially higher than during the opening months of the conflict. Kuwait and Qatar have restored shipments to around 70% of pre-conflict levels, while tanker shuttling and ship-to-ship transfers are allowing producers to move barrels outside the Persian Gulf for collection by vessels unwilling to transit Hormuz themselves. Saudi Arabia has also increased loadings from terminals inside the Persian Gulf as Houthi threats complicate its Red Sea export route. The increase in flows has eased some of the immediate pressure on the physical market, even as the broader supply picture remains constrained.

For now, the improvement in physical flows has given traders more confidence that the market can operate around the disruption without requiring a full diplomatic resolution. Iran and Oman continue negotiating a revenue-sharing arrangement for tanker traffic, but the Wall Street Journal reported that President Trump remains unwilling to return to the terms of the previous ceasefire agreement, leaving the prospect of a broader US-Iran settlement uncertain. Tanker attacks also continue, while the possibility of renewed disruption to Russian crude and refined-product exports adds another source of supply risk. With more Middle Eastern barrels reaching the market but no durable resolution to the conflict, crude remains vulnerable to renewed geopolitical escalation even as the immediate pressure from Hormuz has eased. AEGIS maintains a neutral view on prices.

Natural Gas

Henry Hub gains amid record heat

The September Henry Hub contract expired at $2.91/MMBtu this week, leaving October as the new prompt month. October traded 6c higher, finishing the week at $2.88/MMBtu, driven by record hot temperatures. Winter ‘26/’27 gained 4c to settle at $3.41/MMBtu and Summer ’27 gained 3c to $3.07/MMBtu Meanwhile the EIA reported that the gas storage surplus shrank for a second week.

Following a record hot August for the Lower-48, September is also forecasted to be significantly warmer than average, potentially also record breaking. This should support gas demand as power consumption increases and help to continue shrinking the storage surplus. According to Commodity Weather Group, the combined August-September period is forecast to have 640 cooling degree days, compared with the previous record of 612 in 2019. This follows a relatively average period during the first part of Summer.

After last week’s weekly EIA natural gas storage report showed the storage surplus shrank by 13 Bcf, this week’s report showed another drop, of 18 Bcf. Inventories are now 167 Bcf above the five-year average compared to nearly 200 Bcf a few weeks ago. If forecasts for a record hot September pan out, the surplus may continue to shrink. This has also resulted in our end-of-season estimate for November gas storage falling to 4.02 Tcf, which while still a five-year high, is lower than the 4.04 Tcf projected a few weeks ago. Continued reductions in the storage surplus may help to support the upcoming winter strip in the near-term, however if inventories are above 4 Tcf at the start of winter, it would be a more bearish setup than seen over the past several years.

AEGIS continues to recommend hedging winter months with costless collars given the elevated levels of call-put skew, and swaps in the summer months. Summer ’27 looks to be increasingly at risk if projections of high inventories and the potentially warmer El Niño-driven winter pan out. Beyond Summer ’27, fundamentals look tighter as LNG demand begins growing at a sharper pace.