Oil Prices Rally Amid US-Iran Tensions and Supply Disruptions

Oil prices rose on August 12 as doubts over a potential US-Iran peace deal and reports of attacks on vessels in strategic waterways heightened concerns about supply disruptions. The Strait of Hormuz, a crucial energy corridor, saw a significant decline in maritime traffic, with only six vessels passing through it on Monday compared to an average of around 11 vessels over the previous ten days.

According to US inventory data, crude oil inventories unexpectedly increased by approximately 9.1 million barrels for the week ending August 7. This exceeded market expectations and could partly ease concerns about supply shortages in the global oil market.

The increase in oil prices was also fueled by reports of attacks on two vessels in the Strait of Hormuz, which are critical routes for transporting oil and petroleum products. The US-Iran conflict has been a major driver of price volatility in recent months, with tensions escalating since July 31 when prices surged by over $1.