(Bloomberg) — Oil advanced a second day following another volatile session as escalating rhetoric over the Iran war raised concerns over a prolonged conflict, outweighing an emergency release of crude reserves by wealthy nations.
West Texas Intermediate gained as much as 3% to $89.87 a barrel after adding almost 5% on Wednesday. Iran told regional intermediaries that for a ceasefire, the US must guarantee that neither it nor Israel will strike the country in the future. Washington is unlikely to accept those terms, further diminishing already fading expectations that the war will end soon.
Oil briefly fell on Wednesday after the International Energy Agency agreed to an unprecedented release of 400 million barrels, surpassing even the drawdown following Russia’s invasion of Ukraine. However, many traders remain wary of the lack of clarity surrounding US release plans, with President Donald Trump indicating he would tap the stockpiles but offering scant detail.
Still, the crucial Strait of Hormuz remains effectively closed to shipping, and the market is keenly watching for normal trade to resume. Three vessels were hit by suspected projectiles in the narrow waterway and the Persian Gulf on Wednesday, highlighting the danger for vessels in the region.
The near-closure of Hormuz, through which a fifth of global oil typically flows, has led to major Gulf producers cutting output and driven up energy prices of crude, natural gas and products such as diesel. The fallout from the war, which is in its second week, has raised concerns about an inflation crisis.
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