Oil prices held onto gains for a sixth straight session, amid doubts about whether an agreement could be reached to restore energy flows through the Strait of Hormuz.
Brent crude approached $90 a barrel after rising 12% over the previous five sessions, while West Texas Intermediate crude was near $84.
Oil futures were sensitive to news regarding efforts to reopen the vital waterway, repeatedly fluctuating between optimism about an imminent agreement and indications of stalled progress.
Uncertainty surrounds the status of the Strait of Hormuz
US President Donald Trump added to the uncertainty surrounding the situation late Tuesday, saying, We have total control of Hormuz, and adding that he does not trust Iran. His remarks came after he presented Tehran with sweeping new demands this week, following its repeated requests for compensation as part of talks aimed at ending the five-month-long war.
Prior to Trump's remarks, the Pakistani defense minister stated that the United States and Iran were close to some kind of arrangement regarding the Strait of Hormuz. Talks between Iran and Oman concerning the Strait of Hormuz have also reached an advanced stage, according to Al Jazeera, citing a spokesperson for the Qatari Ministry of Foreign Affairs.
“The rise in oil prices suggests that markets remain skeptical that an imminent agreement will restore flows through the Strait of Hormuz,” wrote Vivek Dhar, commodities analyst at Commonwealth Bank of Australia, in a note. He added that the depletion of global inventories threatens to push Brent crude toward $100 a barrel.
Brent crude has jumped by about 50% this year, while some fuel prices have risen even more sharply, with diesel also climbing due to the impact of the Russian-Ukrainian war.
The United States expects oil disruptions caused by the conflict with Iran to reach about 600,000 barrels per day through the end of 2027, according to the Energy Information Administration's Short-Term Energy Outlook.
Iran's war continues to put pressure on oil flows
Tensions in the region remain high, as a US Navy helicopter fired two Hellfire missiles at a Panamanian-flagged cargo ship that was attempting to breach a blockade imposed on Iranian ports.
Hostilities have also spread to the Red Sea, where Iranian-backed Houthis have targeted ships and energy infrastructure.
Traffic observed through the Strait of Hormuz has decreased slightly, but some oil is still leaving the waters of the Arabian Gulf, often on tankers with their transponders switched off.
In a related context, US Energy Secretary Chris Wright said in a social media post that nearly 9 million barrels per day are passing through the strait with US military assistance.
Separately, the industry-funded American Petroleum Institute reported that U.S. crude inventories rose by 9.1 million barrels last week, according to a document seen by Bloomberg. If confirmed by official data on Wednesday, this would be the largest increase since February.
Further indications of global market conditions will come later on Wednesday from the International Energy Agency and the Organization of the Petroleum Exporting Countries (OPEC), which are scheduled to release their monthly reports.
Latest price movements:
Brent crude futures for October settlement rose 0.6% to $89.46 a barrel at 8:25 a.m. in London.
West Texas Intermediate crude futures for September delivery rose 0.7% to trade at $83.78 a barrel.
