I asked if crude oil prices will stabilize in an August 27, 2026, Barchart article, concluding with the following:
In late August 2026, considerable bullish and bearish factors are pulling crude oil and oil product prices in opposite directions. Prices are unlikely to stabilize until the U.S. and Iran reach a resolution. Expect continued two-way price volatility in crude oil, gasoline, and distillates as Iran continues to stall, the U.S. exhausts diplomatic options, and the U.S. President’s patience wears thin. I do not expect prices to stabilize in 2026. Markets across all asset classes reflect crude oil price action, which is likely to continue over the coming weeks and months.
Nearby NYMEX crude oil futures were at $81.73 per barrel on August 26, and in late September, the price was higher but has declined from its September high.
Crude oil rallies as it is in a bullish trend since early July
The ceasefire and potential for a conflict-ending MOU between Tehran and Washington sent NYMEX crude oil futures to a low of $67.04 per barrel on July 2. However, the price rallied from the early July low as rhetoric between Iran and the U.S. increased, and contradictory actions and comments caused the hopes for an MOU to collapse.
The daily chart shows that the continuous NYMEX crude oil futures rallied to a high of $104.95 on September 14 and corrected from that high on September 22, to near $89 per barrel. Crude oil had been in a bullish trend since the early July low, but the price failed to hold above the $100 level and was below $90 on September 22.
Iran stalls, the U.S. loses patience. On again, off again, on again negotiations cause volatility
The MOU created hopes that the Iranian leadership and the U.S. could strike a deal that would satisfy the U.S.’s requirement that Iran abandon its nuclear aspirations and reopen the Strait of Hormuz. However, Iran wound up doing what it has over the past 47 years, moving the goalposts during negotiations, and stalling for time while it re-arms and prepares for the next military move. Iran understands that with the November U.S. midterm elections on the horizon, U.S. policy could change substantially as support for the current conflict declines.
While Iran stalled, U.S. President Trump lost patience. The administration rolled out significant economic sanctions on Iran and all of its global trading partners, warning that any breaks in its sanctions could lead to exclusion from the worldwide dollar financial system. Meanwhile, the U.S. has been responding to the latest Iranian attacks on a case-by-case basis, attacking Iranian offensive capabilities and Iranian oil tankers sitting near the Strait of Hormuz in the Persian and Oman Gulfs.
As hopes of a negotiated settlement declined, oil prices rose. The Houthi attacks on Saudi Arabia and control of the Bab Al-Mandeb Strait only escalated matters, pushing crude oil above $100. However, the potential for constructive discussions between the U.S. and Iran at the United Nations on September 22, pushed crude oil prices lower.
Ramping up U.S. production with Venezuelan reserves
As of the week ending on September 11, 2026, the United States was producing 13.944 million barrels of crude oil per day.
The chart shows the United States as the world’s leading oil producer, with output more than 4 million barrels per day higher than second-place Russia.
In August 2026, the Trump administration announced a deal that gives the Pentagon a 35% equity stake in North America Blue Energy Partners (NABEP), which has received concessions to 65 billion barrels of proven Venezuelan crude oil reserves, making NABEP the world’s second-largest oil company, behind Saudi Aramco. The deal will eventually lift U.S. daily production, widening the gap between the world’s first and second-largest petroleum producers.
OPEC has become a toothless tiger
On May 1, the United Arab Emirates, the world’s 7th-largest oil producer, left OPEC, the global oil cartel. OPEC’s stated mission is:
OPEC members, and those countries that cooperate with the cartel on production quotas, have been a powerful force that attempts to control oil prices to achieve the cartel’s mission. However, Iran’s output has ground to a halt, U.S. output has been rising and achieving energy independence, Russia and its allies are under severe sanctions, the UAE has left the cartel, and Venezuela is now aligned with the United States. The once-powerful OPEC, which could move oil prices with comments or production-quota changes, has become a toothless tiger and may be nothing more than a trade association.
While the reshaping of the global oil market could send prices substantially lower over the coming years if the U.S. remains committed to fossil fuel independence, Iranian attacks on neighboring oil-producing and refining countries and logistical issues surrounding the Strait of Hormuz and Bab al-Mandeb Strait could cause sudden upside spikes in oil prices as the conflict continues to grip the region.
Expect volatility to continue, as the trends will be a trader’s best friend
Markets reflect the economic and geopolitical landscapes, which remain highly uncertain in the global oil market. Moreover, markets across all asset classes reflect daily price action in the oil market because oil remains the energy source that powers the world, affecting inflation and interest rates. While traditional inflation measures exclude food and energy prices, energy is an input in all goods and services.
Therefore, until there is a solution to the ongoing Middle East conflict, we should expect crude oil prices to remain volatile.
The monthly continuous NYMEX crude oil futures chart shows support at the July 2026 low of $67.04 and resistance at the March 2026 high of $119.48 per barrel. In late September 2026, the price is near the 2026 midpoint of $93.26 per barrel. The most recent trend had been higher, but the price dropped on September 21 and 22, sending it below the midpoint.
We should expect continued volatility in crude oil prices. Iran is likely to continue its aggressive posture. It will try to stall negotiations until after the U.S. midterm elections, which could shift support for the current U.S. military posture. The U.S. administration would like to de-escalate and lower oil prices before the November 3 election. I expect oil prices to remain volatile for the rest of 2026 and into 2027.
