News Desk: Oil prices rose by more than $2 per barrel on Wednesday as tensions between Iran and the United States intensified, attacks on vessels raised concerns over global supplies, and US crude oil inventories recorded a sharp decline.
Brent crude futures climbed by $2.06, or 1.9%, to $110.85 per barrel by 10:48 GMT, bringing prices closer to a five-month high. US West Texas Intermediate (WTI) crude futures gained $2.13, or 2.2%, to reach $99.95 per barrel, according to Reuters.
Iran-US tensions put oil markets on edge
Oil prices had already reached multi-month highs during the previous trading session. Brent crude touched a five-month peak, while WTI hit its highest level in six months. Prices later retreated amid reports of possible mediation efforts between Iran and the United States.
However, hopes for diplomatic progress weakened after Iranian officials adopted a firm stance towards Washington. Foreign Minister Abbas Araqchi told the Financial Times that Iran was fully prepared to defend itself.
Iranian President Masoud Pezeshkian also criticised US actions, saying Washington could not expect Tehran to engage in dialogue while continuing its blockade and threats.
Analysts at PVM said neither of the two major geopolitical conflicts supporting higher oil prices,the Middle East conflict and the Russia-Ukraine war,showed signs of easing.
Tanker attacks raise concerns over oil supplies
Growing attacks on vessels have added to fears of disruptions to global energy shipments. Data from Kpler recorded at least 18 attacks on vessels over the previous two weeks.
Iran was reportedly targeting tankers beyond the Strait of Hormuz, with risks extending into the Gulf of Oman. Analysts at LSEG warned that such incidents could disrupt crude oil loading and ship-to-ship transfers that help move oil from the region.
Any prolonged disruption to shipping routes could tighten supplies and push prices higher.
Houthi attacks add to Middle East concerns
Iran-aligned Houthi forces also claimed responsibility for attacks on Saudi targets. On Monday, the group said it had targeted a Saudi Aramco facility in Yanbu, the Shaybah oilfield and airports in Riyadh and Abha, Reuters reported.
The reported attacks have heightened concerns about the security of energy infrastructure in the Middle East, a key region for global crude oil production and exports.
US crude inventories fall by 4.9 million barrels
Supply concerns were reinforced by a decline in US oil stocks. Crude inventories fell by 4.9 million barrels in the week ended October 16, according to market sources citing data from the American Petroleum Institute.
US gasoline and distillate inventories also declined, adding further support to oil prices.
Meanwhile, officials at the US Department of Energy said Washington was working with refiners around the world to increase fuel production.
Investors are awaiting the US government's official inventory report, scheduled for release at 14:30 GMT on Wednesday. The figures could offer further clues about supply conditions and determine the next direction of oil prices.
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