US-Iran war: Oil prices edged higher in early trade on Wednesday, extending their gains for a fourth consecutive session amid continued supply concerns. Investors remained focused on conflicting signals from Tehran and Washington over whether the Strait of Hormuz remains open for shipping.
Brent crude futures rose 26 cents, or 0.29%, to $91.28 a barrel, while US West Texas Intermediate crude gained 37 cents to trade at $85.31 per barrel.
Both benchmarks had settled at their highest levels since July 24 on Tuesday, as prospects of a peace agreement between the US and Iran appeared to diminish.
What’s driving crude oil prices?
US President Donald Trump said on Tuesday that no negotiations were underway with Iran and maintained that the Strait of Hormuz remained open, contradicting Tehran’s claim that the strategically important waterway was still closed to shipping.
A temporary ceasefire ended on Monday, while a senior Iranian official was quoted as saying by Reuters that Iran was shifting to a “fully offensive” military stance amid the diplomatic deadlock. However, there were no reports of new attacks by either side on Tuesday.
In a bid to bypass the Strait of Hormuz, Iraq’s cabinet on Tuesday approved a mechanism to export Iraqi crude through specialised international and domestic companies using several export routes, the government said. Under the arrangement, contracts will be valid for three months beginning September 1, according to a statement released following the cabinet meeting.
Meanwhile, two major Chinese shipping companies have halted the movement of oil tankers through the Strait of Hormuz and the Bab al-Mandeb Strait amid the escalating Middle East conflict. Instead, they are sourcing oil cargoes from locations outside the Gulf, according to three industry executives, tanker-tracking data and a ship broker.
In the United States, crude oil and distillate inventories declined last week, while gasoline stocks increased, market sources said on Tuesday, data released by the American Petroleum Institute, was quoted as saying by Reuters.
(With inputs from Reuters)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
