Oil prices held near multi-month highs on Wednesday as traders weighed signs that the US and Iran could be moving closer to an arrangement over the Strait of Hormuz, even as physical traffic through the critical waterway remains severely disrupted.
Brent crude traded near $89 a barrel after gaining 12% over the previous five sessions, while West Texas Intermediate was above $83. Pakistan’s Defence Minister Khawaja Asif said Washington and Tehran were “close to some sort of arrangement” over Hormuz, adding that “things are shaping up in favor of peace.” Pakistan has been mediating efforts to end the conflict.
Talks between Iran and Oman over Hormuz have also reached an advanced stage, Al Jazeera reported, citing a Qatari foreign ministry spokesperson.
The prospect of an agreement has made Hormuz headlines a key driver for crude prices. Oil futures have swung between expectations of a reopening and concerns that negotiations could stall.
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US Energy Secretary Chris Wright said almost 9 million barrels a day is crossing the strait with US military assistance. The situation remains volatile. A US Navy helicopter fired two Hellfire missiles at a Panama-flagged cargo vessel attempting to breach a blockade of Iranian ports.
The disruption has pushed crude more than 40% higher this year. Product prices have risen further, with diesel also affected by supply disruptions linked to the Russia-Ukraine war.
US Stockpiles And OPEC, IEA Reports In Focus
The American Petroleum Institute reported that US crude stocks increased by 9.1 million barrels last week, according to a document seen by Bloomberg. If confirmed by official data, it would be the largest weekly increase since February.
The US Energy Information Administration expects oil supply disruptions linked to the Iran conflict to reach about 600,000 barrels a day through the end of 2027.
The International Energy Agency and OPEC are also due to release their monthly market reports on Wednesday, offering fresh estimates on global oil supply and demand.