Oil Prices Soar on Ongoing Strait of Hormuz Uncertainty
Oil prices surged to a three-week high on Wednesday due to ongoing uncertainty over shipping through the Strait of Hormuz and supply disruptions. Brent crude futures rose by $0.59, or 0.54 cents, to reach $91.56 per barrel, while US West Texas Intermediate (WTI) futures increased by $0.69, or 0.59 cents, to $85.53 a barrel.
The Strait of Hormuz remains a significant concern for energy markets as it carried about one-fifth of global oil and liquefied natural gas supplies before the conflict escalated at the end of February. Disagreements over maritime traffic conditions persist, causing commercial shipping through the waterway to continue at near full disruption.
KCM chief market analyst Tim Waterer noted that confidence in safe passage remains low, with shipping volumes still below normal levels. This uncertainty is keeping a geopolitical risk premium embedded in the oil price, he added.