Brent Crude Surges Past $91 as Hormuz Tensions Persist
Oil prices continued their upward trend on Wednesday, with Brent crude futures rising by about 0.8% to $91.71 in Asian trading. This increase brings Brent above its three-week high and US West Texas Intermediate near $86.
The latest move is largely driven by geopolitical risks rather than a sudden improvement in demand. The Strait of Hormuz, a key oil route, remains congested due to ongoing tensions between the US and Iran. Shipping activity through the waterway has fallen sharply, with confirmed crossings down 19.5% last week.
Analyst June Goh from Sparta Commodities sees the renewed threats around both Hormuz and Bab el-Mandeb as supportive for crude in the near term. However, Gulf producers are looking for alternative routes to move their barrels, which could soften the impact of any prolonged disruption.
The EIA estimates that just 4.9 million barrels a day of crude and petroleum liquids moved through Hormuz in the second quarter, down from 21.6 million barrels a day before the conflict. It expects flows to remain severely constrained through August before recovering gradually.