Oil prices rose on Wednesday after falling to two-month lows in the previous session. The market moved between hopes for de-escalation in the US-Israeli war on Iran and concern about attacks on shipping in the Strait of Hormuz. Brent futures climbed $1.04, or 1.1%, to $92.53 a barrel by 0420 GMT, while US West Texas Intermediate crude rose 67 cents, or 0.8%, to $86.71.
Prices were volatile. In the previous session, oil initially dropped by more than $3 a barrel after US officials played down the need for further military strikes on Iran. Part of those losses was recovered after an Iranian security official said no talks were taking place between the two sides.
Shipping attacks in the Strait of Hormuz continue
Data from the Washington Institute for Near East Policy showed little sign of fewer attacks in November, after 37 ships were attacked in October. That was the highest monthly total since the Middle East war began, according to the institute’s figures.
Also read: Iran says four tankers destroyed by mines in Strait of Hormuz · Oil prices fall for fourth day as Iran war escalation risk eases
The United Kingdom Maritime Trade Operations agency said a tanker was struck northeast of Lima in Oman on Tuesday. Iran’s Revolutionary Guards Navy said in a separate statement that two tankers caught fire after hitting naval mines on what it called an “unauthorized route” in the strait.
June Goh, senior analyst at Sparta Commodities, said vessel attacks in Gulf shipping lanes had increased amid uncertainty over diplomatic talks. She added that with the US midterms over and more crude flowing out of the Middle East, the oil price appeared to have more bearish tones. She said the main driver for oil was how far Iran would engage with US demands for a diplomatic agreement.
LSEG Oil Research said in a note dated November 10 that even if a deal were struck, any increase in flows through the waterway would still depend on mine clearance, insurance costs and whether shipowners were willing to take the risk.
Russian refinery cuts and renewed peace talks
A regional governor said a drone attack caused a fire in the port area of Ust-Luga, on the Baltic Sea in northwest Russia, on Wednesday. Three workers were injured. Industry sources said Russian oil refining capacity had been reduced by about 30% since late October following renewed Ukrainian drone attacks.
Meanwhile, market sources said US crude stocks rose in the latest completed week, citing American Petroleum Institute data. Crude inventories rose by 9 million barrels in the week that ended on November 6.
Russian and Ukrainian officials met in Abu Dhabi on Tuesday for their first peace talks since February, as envoys for US President Donald Trump launched a fresh push to end the war.
