Brent Oil Climbs Near $90 As Hormuz Talks Stall
The brent oil price climbed to $89.53 a barrel as attacks on shipping in the Middle East rattled supply expectations and pushed traders back toward risk…
WASHINGTON — The brent oil price climbed to $89.53 a barrel on Wednesday, after attacks on shipping in the Middle East cast doubt on prospects for a breakthrough in talks to reopen the Strait of Hormuz. Brent crude rose more than 2 percent overnight into Wednesday, bringing the international benchmark close to $90.
The move matters well beyond oil traders. The Strait of Hormuz carries about one-fifth of global oil shipments, and any delay in reopening it keeps supply fears alive for companies, shippers and consumers already dealing with a volatile energy market.
Brent oil price stays near a key threshold
Brent futures for October delivery stood at $89.53 at 08:00 GMT, according to the market update cited by Al Jazeera. That level was about 24 percent higher than before the start of the US-Israel war on Iran in late February.
At the same time, CNBC reported Brent crude futures gained 7 cents to close at $88.98 per barrel, while U.S. West Texas Intermediate crude added 7 cents to settle at $83.27 per barrel. The two reports show a market that stayed firm even as prices moved within a narrow band.
Tim Waterer, chief market analyst at Australia-based KCM Trade in Sydney, said the market had not given up on a deal, but confidence was slipping. “Markets have not completely lost hope for a deal, but confidence is clearly eroding,” he told Al Jazeera.
He added that the longer negotiations drag on, and the more complex the reported demands become, the more sceptical traders grow that a workable agreement can be reached quickly. “Optimism from earlier in the month is steadily being replaced by a more cautious, risk-premium-driven stance,” Waterer said.
Shipping attacks keep supply worries alive
The latest jump came after Yemen’s internationally recognised government accused the Iran-aligned Houthis of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb strait. Yemen’s coastguard said two of the victims were security personnel sent on a rescue mission after the first attack.
Hours later, US Central Command said it attacked and disabled a Panama-flagged cargo vessel after it attempted to break the US blockade of Iranian ports. CNBC said the incidents underscored the growing impact of the nearly six-month-old war on two key global shipping routes, even as diplomatic efforts toward reopening the Strait of Hormuz showed signs of progress.
Interactive Brokers Senior Economist José Torres said concerns over Middle East oil supplies remained widespread despite signs that the U.S. and Iran may be moving closer to an agreement. He said markets were still waiting for concrete progress. “Investors have been awaiting a deal for a few weeks, and tangible progress is likely required for yields to fall significantly and stocks to rally further at this juncture,” Torres said in a note late Tuesday.
The brent oil price has stayed elevated because traders are still pricing in disruption risk, not just current supply. Fortune reported oil at $89.53 per barrel at 6:30 a.m. Eastern Time, calling it $22.30 higher than a year earlier, a gap that shows how quickly geopolitical tension can push energy costs back into focus.
For now, the next swing in crude will likely come from the same place as the last one: whether the talks around Hormuz produce a real opening, or whether the shipping attacks keep the market leaning on a higher risk premium.
