Oil Gains on US-Iran Uncertainty

Crude oil reversed earlier gains to trade around $97 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.

Crude oil climbed to around $100 a barrel on Wednesday, its highest level since September 17 as continued attacks in the Strait of Hormuz heightened concerns over global supply security. The UK Maritime Trade Operations agency reported that a vessel had been struck near Oman, while 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 have remained relatively strong. US Secretary of State Marco Rubio said Tuesday that shipments through the chokepoint were approaching prewar levels, while data from Kpler and Vortexa showed broader Middle Eastern exports had increased since the summer. Investors are also awaiting US inventory figures due later Wednesday, after the American Petroleum Institute reported a 4.9 million-barrel decline in crude stocks last week.

Crude oil rose toward $99 per barrel on Wednesday, resuming its advance 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.