Oil prices continued their upward run on Wednesday, gaining for a fourth straight session as markets remained concerned about potential disruptions to crude supplies. Uncertainty over the status of the Strait of Hormuz and the lack of progress between the US and Iran kept traders focused on geopolitical risks. Brent crude rose 26 cents, or 0.29%, to $91.28 a barrel, while West Texas Intermediate (WTI) gained 37 cents to $85.31. Both benchmarks ended Tuesday at their highest levels since July 24.
Why Are Oil Prices Rising?
The latest gains came as hopes of a US-Iran peace agreement weakened. US President Donald Trump said there were no negotiations with Tehran and maintained that shipping through the Strait of Hormuz remained possible. Iran, however, has given a different account of the situation, claiming the crucial shipping route remains closed. A senior Iranian official also told Reuters that Tehran had adopted a “fully offensive” posture after the end of a temporary ceasefire on Monday. Despite the escalating rhetoric, there were no reported attacks by either side on Tuesday.
How Are Countries Responding To Hormuz Disruption Risks?
Iraq is looking for alternative ways to move its crude as uncertainty around the waterway persists. Its cabinet has approved a plan allowing Iraqi oil to be exported through multiple routes using international and domestic companies. The contracts under the arrangement will run for three months from September 1.
Meanwhile, two major Chinese shipping firms have stopped sending oil tankers through both the Strait of Hormuz and the Bab al-Mandeb Strait, according to industry sources and tanker-tracking data. The companies are instead obtaining oil cargoes from outside the Gulf region.
What Do US Oil Inventories Show?
US crude and distillate inventories fell last week, while gasoline stocks increased, according to American Petroleum Institute data cited by Reuters. The inventory movements, combined with continued uncertainty over Middle East supplies, are being closely watched by oil traders as they assess the outlook for crude prices.
