Oil prices rebounded on Wednesday after slipping to their lowest levels in nearly two months in the previous session, as persistent attacks on shipping in the Strait of Hormuz offset optimism over a possible
de-escalation of the Iran war.
Brent crude futures rose 71 cents, or 0.78 per cent, to $92.20 a barrel, while US West Texas Intermediate (WTI) crude gained 49 cents, or 0.57 per cent, to $86.53 at 0119 GMT.
Despite hopes of a potential diplomatic breakthrough, concerns over disruptions to shipping through the Strait of Hormuz continue to underpin oil prices. The latest data from the Washington Institute for Near East Policy showed that 37 ships were attacked in the Strait of Hormuz and surrounding waterways in October, the highest monthly tally since the war began. Another 10 attacks have been recorded so far in November.
The security situation in the region remains tense, with multiple vessels coming under attack in recent days. Videos posted on social media on Sunday and verified by Reuters showed a Navig8 tanker on fire off the coast of Oman. The vessel was among three tankers reportedly hit for using what Iranian state broadcaster described as “unauthorised routes” through the strait.
Another tanker was struck northeast of Oman’s Lima, the United Kingdom Maritime Trade Operations (UKMTO) agency said on Tuesday. Separately, Iran’s Revolutionary Guards Navy said two tankers caught fire after hitting naval mines on an “unauthorized route” through the waterway.
Even if diplomatic efforts lead to an agreement, restoring normal shipping activity could take time, analysts warned.
“Even in the event a deal is struck, an increase in flows through the waterway would still depend on mine clearance, insurance costs and whether or not shipowners would even be willing to take the risk,” LSEG analysts said in a November 10 note. “Meanwhile, attacks have not slowed.”
Oil Market Volatility Continues
Oil prices witnessed sharp swings in the previous session, initially falling by more than $3 a barrel after US officials played down the prospect of further military strikes against Iran. However, prices recovered some losses after an Iranian security official said that no talks were taking place between Tehran and Washington.
Meanwhile, developments on the supply front also influenced market sentiment. US crude inventories increased sharply in the latest week, with crude stocks rising by 9 million barrels in the week ended November 6, according to data from the American Petroleum Institute (API), cited by market sources, as per Reuters.
In another development, Russian oil refining capacity has declined by around 30 per cent since late October following renewed Ukrainian drone attacks, industry sources said.
At the same time, diplomatic efforts to end the Russia-Ukraine war gained momentum, with Russian and Ukrainian officials meeting in Abu Dhabi on Tuesday for their first peace talks since February. The discussions came as envoys of US President Donald Trump renewed efforts to broker an end to the conflict.
With geopolitical developments in the Middle East, shipping disruptions and uncertainty over global oil supplies continuing to shape sentiment, crude prices are likely to remain sensitive to fresh developments in the coming sessions.
(With inputs from Reuters)
