Red Sea Oil Premium Revived as Houthi Attack Claim Hits Hormuz Traffic

The crude oil market experienced a whipsaw on Wednesday after news of a potential deal on Iran's nuclear program was met with skepticism, leading to a 5% drop in prices on Tuesday.

The Houthi attack claim near Yanbu revived the Red Sea oil premium just hours after Tuesday's selloff, causing Brent crude to recover faster than WTI. The market still prices direct risk to Middle East export cargoes, showing that diplomatic efforts are not yet having a significant impact on physical trade.

The Hormuz traffic remains barely above depressed levels, leaving Tuesday's diplomacy-led crude oil selloff unconfirmed. The API reported a 2.7 million barrel build, giving bears a domestic number to pair with the diplomatic headlines.