US-Iran war: Oil prices climbed on Wednesday as uncertainty over a potential US-Iran peace agreement, along with attacks on two vessels, raised concerns over possible disruptions to crude supplies from the Middle East. The gains came despite industry data pointing to a rise in US crude inventories.
Brent crude futures had risen 72 cents, or 0.81%, to $89.63 a barrel, extending its rally to a sixth day, while US West Texas Intermediate (WTI) crude was up 71 cents, or 0.85%, at $83.91.
Both benchmarks ended more than $1 higher in the previous session, reaching their highest closing levels since July 31. The gains followed a roughly 5% surge on Monday, as optimism over a possible US-Iran peace deal weakened.
What’s driving crude oil prices today?
Pakistan’s Defence Minister said the United States and Iran are “close to some sort of arrangement” concerning the Strait of Hormuz. Separate discussions between Iran and Oman over the strategic waterway have also made significant progress, Al Jazeera reported, citing a spokesperson for Qatar’s foreign ministry.
Oil prices have remained highly responsive to developments surrounding efforts to reopen the critical shipping route, with futures repeatedly shifting between expectations of an imminent agreement and concerns that negotiations may be losing momentum. Regional tensions remain elevated after a US Navy helicopter fired two Hellfire missiles at a Panama-flagged cargo ship that was reportedly attempting to breach a blockade of Iranian ports.
Visible shipping activity through the Strait of Hormuz has fallen sharply, although some crude continues to leave the Persian Gulf, with several tankers reportedly operating with their transponders turned off. US Energy Secretary Chris Wright said in a social media post that nearly 9 million barrels of oil per day are moving through the strait with assistance from the US military.
Crude oil prices have climbed more than 40% this year, while some refined product prices have risen even more sharply. Diesel prices have also been affected by disruptions linked to the Russia-Ukraine conflict. According to the US Energy Information Administration’s Short-Term Energy Outlook, the US expects oil supply disruptions related to the Iran conflict to average around 600,000 barrels per day through the end of 2027.
Pakistan’s Defence Minister Khawaja Asif told reporters on Tuesday that “things are shaping up in favor of peace,” though he did not provide further details. Pakistan has been involved in diplomatic efforts aimed at ending the conflict. His comments came after US President Donald Trump adopted a tougher position toward Iran.
(With inputs from agencies)
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