Oil prices rise after ship attacks, US-Iran talks deadlock

LONDON: Oil prices rose in volatile trade on Wednesday after attacks on two ships reinforced worries about disruptions to Middle East supplies and as talks to end the Iran war hit an impasse.

Brent futures were up 17 cents, or 0.2%, at $89.08 a barrel by 1055 GMT, heading for a sixth day of gains. U.S. West Texas Intermediate (WTI) crude rose 20 cents, or 0.2%, to $83.40, heading for a fifth daily gain.

Both contracts earlier rose more than $1 before dipping briefly as focus turned to U.S. crude stockpile data which industry sources indicated might have swelled.

They resumed gains after a senior Iranian source told Reuters there were no discussions between Iran and the United States to extend their ceasefire because from Tehran’s perspective, the deal had no start date and therefore there was nothing to extend.

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Two ships attacked in Middle East

The United States and Yemen’s Houthis reported separate attacks on shipping in the Strait of Hormuz and the Bab el-Mandeb Strait on Tuesday, two crucial export routes for Middle Eastern oil and gas in addition to the Suez Canal.

Shipping data showed the number of vessels transiting Hormuz fell to a one-week low of eight on Tuesday. Before the war, 125 to 140 vessels passed through the crucial waterway each day.

US crude stockpile data

Investor focus was also turning to U.S. crude inventory data due later in the day.

Market sources citing American Petroleum Institute data said U.S. crude inventories rose sharply, while gasoline and distillate stocks fell.

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Crude stocks rose by about 9.1 million barrels, while gasoline and distillate inventories fell by 1.5 million barrels and 596,000 barrels, respectively, from the previous week, the sources said.

The crude build far exceeded expectations and, if confirmed by the Energy Information Administration report at 10:30 a.m. ET (1430 GMT) could ease market concerns about supply tightness, Haitong Futures said in a note.

In Libya, the country’s National Oil Corporation said all fires at fuel storage tanks in the Zawiya oil complex were under control, also easing upward price pressure.

For longer-term supply, the EIA expected significant disruptions to Middle East crude supplies to persist through the end of 2027. The EIA said it expects 2026 Brent crude oil prices to average $86.81 a barrel, and WTI to average $80.88.