Brent Crude Extends Gains Above $91 as Strait of Hormuz Standoff Drags On - How to Trade Oil

Both benchmarks closed Tuesday at their highest levels since 24 July, as investors weighed conflicting signals from Washington and Tehran over whether the Strait of Hormuz remains open to shipping. For UK retail traders watching the headlines, this is a useful moment to understand how oil is traded and what the risks involve.

Why Oil Prices Are Rising: The Strait of Hormuz Standoff Explained

The Strait of Hormuz is a narrow shipping route between Iran and Oman through which a large share of the world's seaborne oil exports pass. According to Reuters, oil prices ticked higher in early trade as investors weighed conflicting messages from Tehran and Washington on whether the strait is genuinely open to ships - the US president has said the waterway is open, while Iran has disputed that position. Brent and WTI both closed Tuesday at their highest levels since 24 July as hopes of a near-term US-Iran agreement faded.

This is an evolving, single-event-driven story - coverage is changing day to day, so figures here are a snapshot as of 19 August 2026. For live pricing, see Trading Economics' Brent crude oil page.

What's Happening With US Crude Inventories

Alongside the geopolitical risk premium, US industry data showed crude inventories fell by 328,000 barrels last week, following a 9.07 million-barrel increase the week before, according to Trading Economics. 

A falling inventory level is generally seen as a sign of tighter near-term supply, adding a second driver to this week's price move.

Brent vs WTI: What's the Difference

Brent crude and West Texas Intermediate (WTI) are the two most widely referenced global oil benchmarks. Brent is sourced from North Sea fields and serves as the reference price for roughly two-thirds of the world's internationally traded crude, while WTI is the US benchmark, sourced domestically and priced for delivery at Cushing, Oklahoma. 

The two typically trade at a spread reflecting differences in quality, transport costs and regional supply-demand balances. Brent has generally traded at a premium to WTI in 2026, consistent with today's roughly $6 gap between the two benchmarks.

How to Trade Oil as a Retail Trader

Retail traders in the UK typically access oil price movements without owning physical barrels, using derivative products that track the underlying price. The two most common routes are CFDs (contracts for difference) and spread betting.

Trading Oil via CFDs

A CFD is a contract for difference - an agreement to exchange the difference in an asset's price between when a position is opened and closed, without ever owning the underlying asset. CFDs let traders speculate on oil prices rising (going long) or falling (going short), and are typically traded with leverage, meaning only a fraction of the total position size is required upfront as margin.

Leverage note: losses can exceed your initial deposit when trading with leverage. This applies to all leveraged oil trading, not only during volatile periods like the current Hormuz standoff.

Trading Oil via Spread Betting

Spread betting works similarly to CFD trading - taking a position on whether an oil benchmark's price will rise or fall - but any profits are currently free from UK capital gains tax, a treatment that depends on individual circumstances and may change in future. As with CFDs, spread betting is typically leveraged, carrying the same risk that losses can exceed the amount originally staked.

*Tax treatment depends on individual circumstances and may be subject to change.

Risks to Consider When Trading Oil

• Losses can exceed your initial deposit when trading with leverage.
• Oil prices can move sharply and unpredictably on geopolitical developments - in either direction.
• Overnight funding charges apply to leveraged positions held open past the trading day.
• 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
• Past price moves, including this week's rally, do not indicate what oil prices will do next.

FAQ

Past performance is not a reliable indicator of future results.