Hormuz Tensions Drive Oil Prices Higher for Fourth Straight Session

Oil prices rose for the fourth consecutive session on Wednesday due to ongoing tensions between the US and Iran over the Strait of Hormuz. The Brent crude price increased by 0.45% to $85.32 a barrel, while WTI futures were yet to begin trading.

The dispute shows no signs of resolution, with US President Donald Trump stating that talks with Iran are not taking place, despite earlier Iranian assertions that no dialogue was scheduled. However, Trump did confirm that the Strait remains open.

Shipping data indicates commercial transit through Hormuz has remained at a fraction of pre-war levels, suggesting continued disruptions in global oil supplies. This is concerning, given that roughly one-fifth of the world's oil consumption passed through this key waterway prior to the conflict.

The situation was further exacerbated by data from the Energy Information Administration showing a small contraction in US inventories last week, which usually heralds a similar trend in official inventory data. This trend points to tighter supplies in the country, especially after recent data showed the US Strategic Petroleum Reserve at its lowest level in over 40 years due to the Iran war.