Oil prices rose by more than $1 on Wednesday as escalating tensions in the Middle East stoked fears of supply disruptions, while a drop in US crude and fuel inventories provided further support. Brent crude futures climbed $1.61, or 1.5%, to $110.40 a barrel by 0630 GMT. US West Texas Intermediate crude rose $1.45, or 1.5%, to $99.27 a barrel.
Mediation hopes and Brent’s five-month peak
Prices had fallen in the previous session after Iran’s president discussed mediation efforts with Pakistan’s army chief during a meeting in Tehran. Brent had touched a five-month high before easing back.
Iran reportedly told Pakistan’s army chief there would be no talks with Washington until its demands were met, according to the Iranian media outlet Nournews, which also said a Qatari delegation had arrived in Tehran. There was no official confirmation of those reports.
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Suvro Sarkar, head of energy research at DBS, said the market was seeing a mix of profit-taking and optimism about a deal brokered by Qatar or Pakistan. He added that any agreement still looked very distant, and that inventory data showing continued US draws had compounded the picture.
Attacks on tankers and Saudi energy sites
Maritime security is also worsening. Shiptracker Kpler said on Monday that at least 18 vessel attacks had been recorded over the past two weeks. LSEG analysts warned that Iran was targeting tankers well beyond the Strait of Hormuz, reaching the Gulf of Oman and putting Gulf crude loadings and ship-to-ship transfers at risk.
In Saudi Arabia, the Houthis claimed responsibility on Monday for attacks on a Saudi Aramco site in Yanbu, the Shaybah oilfield, and the Riyadh and Abha airports. The death toll from a Houthi attack on Yemeni government forces rose to 73 as fighting intensified.
Iranian Foreign Minister Abbas Araqchi said in a television interview aired on Tuesday that Tehran had not received a response from Saudi Arabia or the Houthis to its offer to help broker peace talks.
US stock draws and fuel output push
Market sources citing API data said US crude stocks fell by 4.9 million barrels in the week ended October 16. Two Energy Department officials said on Tuesday they were working with refiners around the world to boost fuel output, as a diesel shortage had pushed prices higher.
Wall Street stocks finished mostly higher on Tuesday, with the Dow adding about one percent.
