Global oil prices climbed above $90 per barrel on Wednesday as renewed military tensions in the Middle East heightened concerns over crude supplies, extending a sharp rally after three consecutive sessions of decline.
- +Iran tensions, supply fears lift oil above $90
According to Oilprice.com, Brent crude rose to $90.39 per barrel, reflecting mounting fears over supply disruptions as the conflict involving the United States, Iran and its regional allies intensified.
According to Oilprice.com, Brent crude rose to $90.39 per barrel, reflecting mounting fears over supply disruptions as the conflict involving the United States, Iran and its regional allies intensified.
Reuters reported that the rally followed fresh military developments involving the United States, Saudi Arabia and Iran, alongside a decline in US crude inventories, which further supported prices.
According to the report, the United States and Saudi Arabia launched strikes on Iran-backed groups in Iraq, blaming them for drone attacks on Saudi oil facilities.
The strikes came hours after the US military said it had intercepted a surprise Iranian missile attack targeting American troops in the region. Iran also said it had fired on ships in the Strait of Hormuz and at US military bases in Jordan.
The renewed hostilities raised concerns over oil shipments through the Strait of Hormuz, one of the world’s most critical energy transit routes.
Commenting on the market reaction, UBS analyst Giovanni Staunovo said, “Renewed military strikes in the Middle East and Iranian officials reiterating that they want to control shipping activity through the Strait of Hormuz amid depressed oil flows through the Strait are lifting oil prices again.”
The market was further unsettled after Iran rejected Oman’s proposal for regional joint management of the Strait of Hormuz. A senior Iranian official told Reuters that Tehran had ruled out the proposal, diminishing hopes of resolving the months-long impasse that has disrupted Gulf trade.
Shipping activity through the strategic waterway also remained subdued. Only a few commodity vessels transited the Strait of Hormuz this week, although traffic through the Bab el-Mandeb Strait, an alternative route for Saudi oil exports to Asia, increased on Wednesday.
Regional sources also told Reuters that Yemen’s Houthi group is considering imposing fees on commercial vessels sailing through the southern Red Sea, adding another layer of uncertainty to global shipping.
The Head of Energy Research at DBS Bank, Suvro Sarkar, said oil prices were likely to remain volatile as the geopolitical situation evolves. He said, “We believe Brent oil prices will continue to whipsaw in the $80-$100 per barrel range in the near term as the conflict ebbs and flows in the Middle East.”
Sarkar added that the recent escalation came despite US President Donald Trump’s earlier signal that diplomacy could resume. “This series of stop-start negotiations means a complete removal of the Strait of Hormuz blockade has not been achieved, and oil prices could see a higher floor of around $80 per barrel even under a de-escalation scenario,” he said.
Reuters also reported that OPEC+ is expected to suspend planned oil production increases for three months from October after completing the scheduled return of barrels previously withheld under voluntary output cuts, a move that could provide additional support for crude prices.
