Oil prices extended gains on Wednesday as fresh attacks on shipping in the Middle East raised concerns over further supply disruptions, while uncertainty persisted over a possible US-Iran peace agreement.
Brent crude futures were up 72 cents, or 0.81 per cent, at $89.63 a barrel, while US West Texas Intermediate crude gained 71 cents, or 0.85 per cent, to $83.91. Both benchmarks had settled more than $1 higher on Tuesday, reaching their highest closing levels since July 31. This followed a roughly 5 per cent jump on Monday as expectations of a peace agreement between the US and Iran weakened.
Hormuz, Bab el-Mandeb Remain Key Risks
Fresh concerns followed reports of attacks on shipping in the Strait of Hormuz and Bab el-Mandeb Strait. Iranian security official Mohsen Rezaei said the Strait of Hormuz would remain closed unless Washington accepted Tehran’s conditions for ending the conflict. These conditions include the release of frozen Iranian assets and an end to other conflicts in the region.
Supply concerns also increased after Saudi Aramco delayed the restart of its 400,000-barrel-per-day Jazan refinery to August 30 following attacks claimed by the Houthis. The UAE’s ADNOC said 15 of its vessels had been attacked while passing through the Strait of Hormuz since the conflict began.
Disruptions around the Strait of Hormuz and Bab el-Mandeb are also increasing shipping and insurance costs and forcing some vessels to take longer routes, adding pressure to regional energy flows.