Oil prices rose by more than $1 per barrel on Wednesday as escalating tensions in the Middle East heightened fears of supply disruptions. Declining US crude and fuel inventories also supported prices, adding to uncertainty in global energy markets.
Brent crude futures increased by $1.59, or 1.5%, to $110.38 per barrel. US West Texas Intermediate (WTI) crude rose by $1.36, or 1.4%, to $99.18 per barrel.
The gains followed a volatile trading session on Tuesday, when prices fell after Iran’s president discussed mediation efforts during a meeting with Pakistan’s Chief of Defence Forces and Army Chief, Field Marshal Syed Asim Munir, in Tehran. Brent had reached a five-month high before retreating.
Diplomatic Uncertainty Keeps Oil Markets Volatile
Suvro Sarkar, head of energy research at DBS, said oil prices had experienced significant fluctuations over recent sessions as traders weighed hopes of a diplomatic breakthrough against persistent supply risks.
He attributed the market’s movements to a combination of profit-taking, optimism about a possible Qatar- or Pakistan-mediated agreement, and growing recognition that a deal remained distant.
Inventory data from the American Petroleum Institute (API), showing continued declines in US crude and petroleum product stocks, also contributed to the market’s uncertainty.
Iran has reportedly maintained that it will not enter talks with Washington until its demands are met. Iranian media outlet Nournews reported on Tuesday that a Qatari delegation had arrived in Tehran, although the reports had not received official confirmation.
The uncertain diplomatic outlook has left oil traders closely monitoring developments that could affect production, transportation and exports from the region.
Attacks on Shipping Raise Supply Concerns
Maritime security risks have emerged as another major factor influencing oil prices.
Ship-tracking firm Kpler said on Monday that at least 18 vessel attacks had been recorded over the preceding two weeks.
Analysts at LSEG warned that Iran was targeting tankers beyond the Strait of Hormuz, with reported threats extending into the Gulf of Oman. Such developments could disrupt crude oil loadings in the Gulf and ship-to-ship transfers used to support regional exports.
The Strait of Hormuz is a critical global energy transit route. Any prolonged disruption to shipping through the area could affect oil availability, increase transportation costs and intensify price volatility.
Houthi Attacks Add to Regional Tensions
Regional security concerns have also intensified following claims by Yemen’s Houthi movement that it carried out attacks on Saudi Arabian targets.
The Houthis claimed responsibility on Monday for attacks involving a Saudi Aramco facility in Yanbu, the Shaybah oilfield and airports in Riyadh and Abha.
Meanwhile, the death toll from a Houthi attack on Yemeni government forces on Monday rose to 73 as fighting intensified.
Oil Prices Fall as Investors Weigh Hormuz Risks and Global Supply Outlook
Iranian Foreign Minister Abbas Araghchi said in a television interview broadcast on Tuesday that Tehran had not received a response from Saudi Arabia or the Houthis to its offer to help facilitate peace talks.
The continuing violence and uncertainty surrounding regional diplomacy have added to concerns about the security of oil infrastructure and export routes across the Middle East.
Falling US Inventories Support Crude Prices
In the United States, declining oil inventories have provided additional support to the market.
Two US Energy Department officials said on Tuesday that authorities were working with refiners around the world to increase fuel production as a diesel shortage pushed prices higher.
Market sources citing API data reported that US crude oil stocks fell by 4.9 million barrels in the week ended October 16.
Falling inventories can support oil prices by indicating tighter available supplies, particularly when combined with geopolitical risks that threaten future production or transportation.
Global Energy Outlook Remains Uncertain
Oil markets are facing competing pressures as traders assess the prospects for diplomatic progress, regional security risks and changing supply conditions.
While hopes of mediation have occasionally eased prices, continued tensions involving Iran, threats to maritime transport and declining US inventories have reinforced concerns about the reliability of global energy supplies.
Further developments in diplomatic negotiations and shipping security are likely to remain key factors influencing crude oil prices in the coming sessions.
