Brent crude prices extended their gains for a fourth consecutive day on Wednesday as the unresolved crisis between the United States and Iran continued to disrupt shipping through the Strait of Hormuz and heighten concerns over the security of global oil supplies.
As at the time of writing of 8:25 a.m (WAT), Brent crude was trading at $91.63 a barrel, up 0.67 per cent, while West Texas Intermediate, WTI, stood at $85.62 a barrel, gaining 0.80 per cent. The sustained rise reflects growing concern among market participants over the possibility of prolonged disruption to crude shipments through the strategic waterway.
The latest pressure on the market followed fresh indications that tanker traffic through the Strait of Hormuz had slowed further. Although US President Donald Trump has said the waterway is open and operating, Iran maintains that it remains shut to shipping, while reports of tankers turning away from the route have raised questions over the safety and reliability of maritime transit.
The security situation was further complicated by a report from the United Kingdom Maritime Trade Operations that a vessel was struck by an unknown projectile while conducting an outbound transit of the Strait of Hormuz on Tuesday. The incident has reinforced concerns among ship operators and oil traders over the risks associated with moving cargoes through the chokepoint.
Sparta Commodities senior oil analyst, June Goh, said the renewed shipping risks were supporting crude prices in the near term. “The shipping risks are increasing again as attacks from Iran and Houthis remain prevalent in both key chokepoints, keeping oil prices supported in the near term,” she said.
However, the impact of the disruption could be moderated if Gulf producers succeed in expanding alternative export routes. Goh said producers were seeking routes through the Gulf of Oman that could, if sustained, enable some shut-in production to return to the market. ING’s commodity analysts also reported that Saudi Aramco was marketing Arab Medium and Arab Heavy crude through ship-to-ship transfers from terminals including Sohar.
The alternative routes could provide an important outlet for Gulf crude, but their capacity and reliability remain critical. If tanker traffic through Hormuz remains depressed, producers may face increasing logistical constraints even where crude production is available, potentially pushing up freight and insurance costs while adding to the risk premium in international oil prices.
With Brent at $91.63 a barrel and WTI at $85.62 as of 8:25am, the direction of the market will depend heavily on developments around the Strait of Hormuz and the broader US-Iran confrontation. A sustained restoration of shipping could ease supply concerns, while continued disruption or further attacks could keep crude prices elevated and intensify volatility across the international oil market.