Uncertainty over a ceasefire agreement between Iran and the United States, coupled with new attacks on ships in the Middle East, has escalated concerns about global energy supply. As a result, international oil prices surged again on Wednesday (August 12).
A Reuters report stated that on Wednesday, Brent crude prices in the Asian market rose by 72 cents, or 0.81 percent, to $89.63 per barrel. Concurrently, US West Texas Intermediate (WTI) crude oil prices increased by 71 cents, or 0.85 percent, to $83.91.
This comes after both benchmarks had risen by more than one dollar on Tuesday, pushing oil prices to their highest level since July 31. On Monday, oil prices had already climbed by nearly 5 percent amid diminishing prospects for a peace deal.
Obstructions to shipping in the Strait of Hormuz and Bab al-Mandab have become a major cause for concern regarding supply conditions in the Middle East. On Tuesday, the United States and Iran-backed Houthi rebels in Yemen separately reported attacks on ships in these two waterways.
Iran’s top security official, Mohsen Rezaee, stated that the crucial Strait of Hormuz would remain closed until the United States accepts Iran’s conditions for ending the war. Iran’s demands include the release of its seized assets and the cessation of other conflicts in the Middle East.
According to Reuters shipping data, only six vessels transited the Strait of Hormuz on Monday, compared to an average of approximately 11 vessels over the preceding 10 days. Before the war, an average of 125 to 140 ships used this waterway daily.
US Crude Oil Inventories Increase
Meanwhile, data indicating a rise in US crude oil inventories has also entered the market. Citing information from the American Petroleum Institute (API), market-related sources reported that US crude oil stockpiles increased by approximately 9.1 million barrels in the week ending August 7.
Conversely, during the same period, gasoline inventories in the country decreased by approximately 1.5 million barrels, and distillate inventories fell by 596,000 barrels.
This increase in crude oil inventories is significantly higher than anticipated. Analysts believe that if confirmed by official government data, this could partially alleviate market concerns about supply shortages.
The US Energy Information Administration (EIA) is scheduled to release official inventory data at 10:30 AM local time on Wednesday.
However, long-term concerns about supply conditions persist. According to EIA forecasts, a deficit of approximately 600,000 barrels per day in crude oil supply from the Middle East could continue until the end of 2027.
Consequently, if the Iran-US conflict is not resolved swiftly and shipping in the Strait of Hormuz does not return to normal, there remains a risk of further increases in international oil prices.