Oil Prices Soar Amid Middle East Tensions

Oil prices surged on Wednesday as tensions in the Middle East continued to rattle global markets. The uncertainty surrounding a US-Iran peace deal and fresh attacks on ships raised concerns about supply disruptions in the region.

Brent crude futures gained 72 cents, or 0.81%, to $89.63 a barrel by 0053 GMT, while US West Texas Intermediate (WTI) crude rose 71 cents, or 0.85%, to $83.91.

The rise in prices comes after the markets already settled more than $1 higher on Tuesday and reached their highest closing levels since July 31. Earlier this week, oil prices jumped about 5% as hopes for a US-Iran peace deal weakened.

Shipments through strategic waterways have been significantly impacted by these developments. In the Strait of Hormuz, only six vessels passed through on Monday compared to an average of about 11 over the past 10 days. Iran's security official Mohsen Rezaei stated that the strait would remain closed unless the US accepted their conditions, which include releasing frozen Iranian assets and ending other regional conflicts.

However, a sharp increase in US crude inventories could ease some supply concerns. Data from the American Petroleum Institute showed that US crude stocks increased by about 9.1 million barrels in the week ending August 7, while gasoline stocks fell by 1.5 million barrels and distillate inventories declined by 596,000 barrels.

The release of official inventory figures by the US Energy Information Administration (EIA) on Wednesday will provide further insight into the situation. The EIA expects Middle East crude supply disruptions to continue through the end of 2027 at around 600,000 barrels per day.