Oil prices extended gains for a third consecutive session on Wednesday, though at a more modest pace than in previous days, after President Donald Trump threatened further strikes on Iranian infrastructure — just hours after the United States reinstated a naval blockade of the Islamic Republic in the Strait of Hormuz.
Brent crude, the European benchmark, rose 0.74% to $85.36 per barrel, having already accumulated gains of more than 11% over the two preceding sessions. West Texas Intermediate (WTI), the US benchmark, climbed 0.48% to $79.72 per barrel.
Speaking to Fox News, Trump said the United States would continue to strike Iran and could target power plants and bridges as early as next week if Tehran does not return to the negotiating table.
However, Trump reversed course on Tuesday from a plan announced the previous day to impose a 20% tariff on cargo transiting the Strait of Hormuz. Instead, he proposed replacing such ‘tolls’ with trade agreements and investment commitments from Gulf states in the United States. The policy reversal was well received by markets and appears, for now, to be limiting a sharper escalation in crude prices.
With the renewed US naval blockade in place, ‘while crude oil has started to find some balance after recovering from around $70 per barrel, it still takes a brave shipowner to transit the Strait of Hormuz, as the threat of attacks from forces aligned with Tehran remains very real,’ Chris Weston of Pepperstone Group told Bloomberg. ‘The broader geopolitical backdrop continues to deteriorate, providing ongoing support to crude oil prices and keeping buyers primed to return to the market should prices approach the $90 per barrel mark,’ he added.
On Wednesday, a small number of vessels continued to navigate the Strait of Hormuz despite the renewed US blockade and a recent escalation in attacks on shipping. Among those vessels, according to Bloomberg, were a US-sanctioned tanker carrying Iranian oil, a Greek-owned Suezmax vessel loaded with Saudi crude, two fuel tankers, and two bulk carriers.
Over the past month, Gulf producers had begun to increase crude marketing activity after a provisional peace agreement between Washington and Tehran had eased concerns over the region’s oil exports.
In a fresh escalation of the conflict, Iran-backed Houthis in Yemen launched ballistic missiles and drones against Saudi Arabia, marking the first major escalation between the parties since the ceasefire agreed in 2022.
Separately, an industry-backed group cited by Bloomberg reported that US crude inventories fell by 600,000 barrels last week. If confirmed by official data due for release on Wednesday, it would mark the eleventh consecutive weekly drawdown in US crude stockpiles over the past 12 weeks.
Source: Diário Económico
