Oil Prices Rise as US-Iran Tensions Threaten Prolonged Energy Supply Disruptions
Oil prices rose in early trading on Wednesday as tensions between the US and Iran threatened to prolong disruptions to energy supplies from the Middle East. The uncertainty surrounding a possible peace deal between the two nations, combined with attacks on shipping vessels, drove oil prices higher.
Brent futures gained $0.72, or 0.81%, to $89.63 a barrel by 0053 GMT, while US West Texas Intermediate (WTI) crude climbed $0.71, or 0.85%, to $83.91. Both benchmark contracts settled more than $1 higher on Tuesday, marking their highest closes since July 31.
The US and Yemen's Iran-aligned Houthis reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday. Iran's top security official, Mohsen Rezaei, stated that the vital Strait of Hormuz shipping route would remain closed unless the US accepted Iran's conditions for ending the war.
Market sources citing American Petroleum Institute data reported a sharp increase in US crude inventories, with stocks rising by about 9.1 million barrels in the week ended August 7. However, this build far exceeded expectations and could ease market concerns about supply tightness.