Oil prices: Strait of Hormuz tensions keep global energy markets on edge

TOKYO: Oil prices edged higher on Thursday as the prolonged US-Iran conflict and uncertainty surrounding the Strait of Hormuz continued to raise concerns about disruptions to global energy supplies.

Brent crude futures for October delivery rose 26 cents, or 0.28%, to $91.87 a barrel by 0439 GMT. US West Texas Intermediate crude for September gained 17 cents to $86, while the more-active October contract advanced 12 cents, or 0.13%, to $89.91.

Both benchmarks were heading towards a fifth consecutive session of gains after settling on Wednesday at their highest levels since July 24. The September WTI contract expires on Thursday.

Nissan Securities Investment chief strategist Hiroyuki Kikukawa said sporadic attacks in the Middle East continued to support oil prices, although the market lacked fresh momentum without a major escalation.

He said uncertainty surrounding peace talks and tensions involving the United Arab Emirates, Oman and Iran could keep oil prices on a gradual upward path.

The latest concerns followed the UAE’s decision to suspend financial and economic transactions with Iran until further notice, adding to uncertainty over regional stability and energy supplies.

The Strait of Hormuz remains at the heart of the market’s concerns. Before the conflict began on February 28, about one-fifth of global oil consumption passed through the strategic waterway.

Shipping activity has since fallen sharply as operators remain cautious about navigating the route.

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US President Donald Trump said on Tuesday that no talks were taking place with Iran and that the Strait of Hormuz remained open. Iran, however, said the waterway was still closed.

The conflict has also affected refined fuel supplies. US distillate inventories, which include diesel and heating oil, fell for a third consecutive week, according to the Energy Information Administration.

Crude inventories moved in the opposite direction, increasing by 4.4 million barrels in the week ended August 14. Analysts had expected a decline of about 600,000 barrels.

Despite the rise in crude stocks, geopolitical risks continued to support oil prices. Traders are now closely watching diplomatic efforts and developments around the Strait of Hormuz for indications of whether supply disruptions will deepen or ease.