Oil prices rose toward $90 a barrel on Wednesday as fading hopes for a U.S.-Iran peace deal heightened concerns that disruptions to energy supplies and shipping through the Strait of Hormuz could persist.
Brent crude rose 72 cents, or 0.8%, to $89.63 a barrel, while U.S. West Texas Intermediate crude gained 71 cents, or 0.9%, to $83.91 a barrel, according to Reuters.
The gains followed a sharp rise earlier in the week as investors became less confident that Washington and Tehran would reach an agreement that could ease tensions and allow more normal oil shipments through the region.
The Strait of Hormuz has become a major focus for energy markets. Shipping traffic through the waterway has fallen sharply from pre-conflict levels, with only eight vessels tracked through the strait on Tuesday, according to data cited by Reuters. Before the conflict, around 130 to 140 vessels typically passed through the waterway each day.
Iran has said the strait will remain closed unless the United States changes its position and meets Tehran’s conditions. The uncertainty has raised concerns among traders about how long disruptions to crude and other energy shipments could last.
The market is closely watching diplomatic efforts between Washington and Tehran because any agreement that improves security around Hormuz could ease supply concerns and put downward pressure on oil prices. Conversely, a prolonged standoff could keep prices elevated.
The United States and Iran have remained divided over the terms of a potential settlement, with disagreements extending beyond the reopening of Hormuz to broader security and diplomatic issues.
Despite the geopolitical concerns, rising U.S. inventories could provide some relief to the market. The American Petroleum Institute reported a 9.1 million-barrel increase in U.S. crude stocks, although traders were awaiting official government data for confirmation.
The U.S. Energy Information Administration has also warned that some Middle Eastern oil production could remain offline for an extended period, estimating that around 600,000 barrels per day of regional output could remain disrupted through the end of 2027.
