Brent Crude Oil Tops $70

Brent crude reversed earlier gains to trade below $108 a barrel on Wednesday, as relatively strong flows through the Strait of Hormuz offset concerns over escalating attacks on shipping and energy infrastructure across the Middle East. Iran’s Revolutionary Guards said naval mines had halted three tankers attempting to use routes Tehran considered unauthorized, while the UK Maritime Trade Operations agency reported a vessel had been struck near Oman. Despite the security risks, US Secretary of State Marco Rubio said shipments through the chokepoint were approaching prewar levels, while data from Kpler and Vortexa showed broader Middle Eastern exports had risen since the summer. Separately, Yemen’s Houthi militants claimed attacks on Saudi Aramco facilities in Yanbu and the Shaybah oilfield, as well as airports in Riyadh and Abha. Investors awaited US inventory data after the American Petroleum Institute reported a 4.9 million-barrel decline in crude stocks last week.

Brent crude rose toward $111 a barrel, the highest in five months, and close to the peak recorded in early May, shortly after the Middle East conflict began. Continued attacks in the Strait of Hormuz heightened concerns over global supply security, with the UK Maritime Trade Operations agency reporting that a vessel had been struck near Oman. Also, Iran’s state-run IRIB News said a supertanker had hit a sea mine in the strait. Tehran has intensified attacks in recent weeks, with more incidents reportedly targeting vessels’ engine rooms and raising risks for maritime traffic. However, oil flows through the strategic waterway remained relatively strong. US Secretary of State Marco Rubio said that shipments through the chokepoint were approaching prewar levels, while data showed broader Middle Eastern exports increased since the summer. Investors are also awaiting US inventory figures due later Wednesday, after the API reported a 4.9 million-barrel decline in crude stocks last week.

Brent crude rose toward $110 per barrel on Wednesday, resuming its advance toward five-month highs as investors assessed mixed reports on diplomatic progress between the US and Iran. Prices fell sharply on Tuesday after Pakistan’s army chief, Field Marshal Asim Munir, met with senior Iranian diplomatic and military officials in Tehran to discuss bilateral ties and the status of negotiations with Washington. However, a diplomat involved in the discussions dismissed reports that a deal was imminent, while confirming that efforts to end the conflict remain underway. Oil prices have gained more than 10% this month as intensifying hostilities involving Saudi Arabia and Iran-backed Houthi forces, as well as Russia and Ukraine raised supply risks further. At least 18 vessels have also come under attack in the Strait of Hormuz over the past two weeks. Despite these risks, oil flows from the Middle East have largely recovered to around 80% of prewar levels.