Oil Prices Hold Near Five-Week Highs as U.S.-Iran Tensions Persist

Oil prices remain near their highest levels since late July as geopolitical tensions in the Strait of Hormuz continue to support prices. WTI crude is trading at approximately US$90.51 per barrel, up $0.29 from Tuesday's settlement, while Brent crude is at around US$95.14 per barrel, a gain of about 49 cents.

The renewed military confrontation between the United States and Iran has kept fears of disrupted Middle Eastern supply elevated, driving prices higher. The U.S. Energy Secretary Chris Wright reported that approximately 17 million barrels of oil transited the Strait on Monday, the highest daily volume since war-related restrictions began disrupting flows.

While improving physical flows are a bearish signal for prices, attacks on tankers and renewed U.S.-Iran military action leave the possibility of another rapid upside move very much alive. The market is balancing two opposing signals from the Strait of Hormuz, with traders remaining reluctant to remove the renewed Middle East risk premium.