Oil Prices Hold Near Three-Week High as Hormuz Shipping Uncertainty Supports Markets

By COMFORT OGBONNA

Oil prices remained near a three-week high on Wednesday as uncertainty over shipping through the Strait of Hormuz and continuing disruptions to global supplies kept traders focused on the risk of tighter crude markets.

Brent crude futures were up 18 cents, or 0.2%, at $91.20 a barrel by 1302 GMT, while U.S. West Texas Intermediate crude futures rose 16 cents, or 0.19%, to $85.10 a barrel.

Both benchmarks had climbed earlier in the session. Brent reached its highest level since July 30, while WTI touched its highest level since July 31 before giving up some of those gains.

The market has been supported by concerns over the security and reliability of oil shipments through the Strait of Hormuz, a critical route for global energy supplies. Uncertainty surrounding the waterway has kept a geopolitical risk premium in crude prices as traders assess whether normal shipping activity can resume.

Oil prices also received support from a weaker U.S. dollar. The dollar declined after the U.S. Treasury announced plans to increase the size of certain government bond buyback operations, making dollar-denominated commodities such as crude oil relatively cheaper for buyers using other currencies.

The combination of geopolitical uncertainty, supply disruptions and currency movements has contributed to increased volatility in oil markets in recent sessions.

U.S. President Donald Trump said Tuesday that no negotiations were taking place with Iran and said the Strait of Hormuz was open. Iranian officials have maintained that the waterway remains closed, creating uncertainty over the actual conditions facing commercial vessels attempting to pass through the strategic route.

A temporary ceasefire agreement expired Monday, adding to concerns that the conflict could escalate and further disrupt energy infrastructure and transportation routes.

Although there were no reports of new strikes by either side on Tuesday, traders remained cautious because of the lack of progress toward a broader diplomatic resolution.

Market analysts said the uncertainty surrounding safe passage through Hormuz was continuing to support oil prices. Shipping activity through the waterway remained significantly below normal levels as many shipowners chose to avoid the route.

The Strait of Hormuz is one of the world’s most important energy corridors. Before the conflict began, roughly one-fifth of global oil and liquefied natural gas supplies passed through the waterway.

Any prolonged disruption could therefore have significant consequences for global energy markets. Oil producers and consumers would face increased transportation risks, while refiners in countries that depend on crude shipped through the strait could experience higher costs or delays in receiving supplies.

Commercial shipping through the waterway has slowed as operators assess the risks associated with navigating the area. The reduction in traffic has added another layer of uncertainty to an already tight and volatile energy market.

The situation is particularly important for Asian economies, which receive a substantial share of their crude oil and liquefied natural gas supplies through the region. Any extended disruption could force buyers to seek alternative sources or transportation routes, potentially increasing costs.

At the same time, traders are watching other supply disruptions around the world. Reduced shipments from major producing regions could compound the effects of any prolonged interruption through Hormuz, tightening the balance between global supply and demand.

The direction of oil prices in the coming days is likely to depend heavily on developments around the waterway, the broader conflict and efforts to restore reliable commercial shipping.

For now, the market remains caught between the possibility of further supply disruptions and hopes that diplomatic efforts or improved security conditions will allow shipping activity to return toward normal levels.

With Brent trading above $91 a barrel and WTI above $85, investors are closely monitoring shipping data, geopolitical developments and changes in global inventories for signs of whether the recent price gains can be sustained.