Middle East Tensions Push Oil Prices to Three-Week High

Oil prices surged on Wednesday to hit a three-week high as investors grew increasingly anxious about tensions in the Middle East. The United Arab Emirates' decision to suspend all financial and economic transactions with Iran has raised concerns that the situation could escalate further.

The Strait of Hormuz, through which one-fifth of global oil supplies pass, remained slow due to a lack of clear signaling on its reopening from a blockade during the Iran war. Most ship owners have avoided the waterway, causing shipping delays and contributing to the price increase.

Brent crude futures rose 87 cents, or nearly 1%, to $91.89 at 11 a.m. ET (1600 GMT), while U.S. West Texas Intermediate crude futures increased by $1.17, or 1.4%, to $86.11 a barrel. The session high for Brent was its highest since July 30, and WTI reached its highest since July 31.

Analysts point to the geopolitical tensions in the Middle East as a key driver of the price increase. Dennis Kissler, senior vice president of trading at BOK Financial, noted that 'crude futures remain supported by the geopolitical tensions that remain in the Middle East.'

Meanwhile, oil shipments from Russia's western ports have fallen to about 2.3 million barrels per day in the first half of August, 15% below the initial loading plan, due to disruptions at the Black Sea port of Novorossiysk.