Oil Prices Soar on Strait of Hormuz Uncertainty
Oil prices hit a three-week high on Wednesday as concerns about the safety of ships passing through the Strait of Hormuz continued to weigh on traders. Brent crude oil futures rose 45 cents, or 0.49%, to $91.47 a barrel by 0754 GMT, while US West Texas Intermediate (WTI) crude futures gained 45 cents, or 0.53%, to $85.39 a barrel.
The uncertainty surrounding the Strait of Hormuz is keeping an extra geopolitical risk premium in oil prices, said Tim Waterer, chief market analyst at KCM. Shipping volumes remain far below normal levels, and this uncertainty is driving up oil prices.
Iraq is also looking for alternative routes to export its crude oil as tensions continue to rise in the region. The country's cabinet approved a system to export Iraqi crude through specialized international and local companies and several export outlets, which could help keep oil exports moving while shipping conditions remain uncertain.