Middle East Supply Disruptions Dominate Amid Doubts on US-Iran Deal
Oil prices rose on Wednesday, driven by increasing doubts over a potential US-Iran agreement and attacks targeting two vessels. These developments heightened concerns about Middle East supply disruptions, despite preliminary data indicating a rise in US crude inventories. Brent crude futures climbed 72 cents (0.81%) to $89.63 per barrel by 00:53 GMT, while U.S. West Texas Intermediate (WTI) crude gained 71 cents (0.85%) to $83.91. Both benchmarks had settled over a dollar higher on Tuesday, reaching their highest closing levels since July 31, extending gains after a nearly 5% jump on Monday as hopes for a Washington-Tehran deal faded. These developments coincided with the US and the Iran-aligned Houthi group in Yemen announcing separate attacks on two ships in the Strait of Hormuz and Bab al-Mandab on Tuesday. In this context, Mohsen Rezaee, Secretary of Iran's Supreme National Security Council, stated Tuesday that the Strait of Hormuz would remain closed unless Washington accepts Tehran's conditions for ending the conflict: unfreezing Iranian assets and ending regional wars, including in Lebanon and Gaza. Shipping data revealed a decrease in navigation traffic through the Strait of Hormuz to six vessels on Monday, compared to a 10-day average of about 11. Prior to tensions, navigation levels averaged between 125 and 140 ships daily. Regarding supply, a Reuters poll Tuesday indicated expectations for a decline in US crude oil and fuel inventories last week. However, market sources, citing American Petroleum Institute (API) data, reported a sharp increase in US crude inventories during the week ending August 7, while gasoline and distillate stockpiles decreased. The sources clarified that crude inventories rose by approximately 9.1 million barrels, while gasoline and distillate inventories fell by 1.5 million and 596,000 barrels, respectively, compared to the previous week. Investors await official figures from the U.S. Energy Information Administration (EIA), the Department of Energy's statistical arm, due at 10:30 AM Eastern Time (14:30 GMT) on Wednesday. In the long term, the EIA anticipates continued disruptions of about 600,000 barrels per day of crude oil supplies from the Middle East until the end of 2027.
