Key Points
- Brent crude trades above $110 a barrel in early Wednesday trading
- Vessel attacks and threats to energy infrastructure deepen supply disruptions
- Diplomatic efforts led by Pakistan for durable peace yet to ease market uncertainty
ISLAMABAD: Oil prices rose on Wednesday as renewed threats to shipping and energy infrastructure in the Middle East heightened fears of supply disruptions, offsetting hopes that diplomatic efforts could ease the conflict.
Consequently, Brent crude hovers near $ 1 barrel in early trading.
Brent crude futures rose 85 cents, or 0.78 per cent, to $109.64 a barrel at 0022 GMT, while US West Texas Intermediate (WTI) crude gained 76 cents, or 0.78 per cent, to $98.58.
Later market data showed Brent trading above $110, with WTI approaching $99. Prices remain volatile following Tuesday’s retreat from a five-month high.
Oil shipping risks spread beyond Hormuz
Concerns intensified after a supertanker caught fire following a reported sea-mine incident south of the Strait of Hormuz, according to Iranian media.
Maritime intelligence provider Kpler reported at least 18 ship attacks over two weeks.
The heightened threat to shipping has raised concerns about crude oil and petroleum products through key regional routes, including the Gulf of Oman and the Red Sea.
Disruptions could affect loading operations and tanker movements even where oil production continues.
The Houthis have also claimed responsibility for attacks on Saudi energy facilities, including a Saudi Aramco site in Yanbu and the Shaybah oilfield, as well as airports in Riyadh and Abha.
Further damage to energy infrastructure or shipping could tighten supplies and increase transportation costs.
Diplomacy offers limited relief
Oil prices fell on Tuesday after soaring to an intraday high of $111.99 a barrel for Brent.
The international benchmark settled down 76 cents, or 0.69 per cent, at $108.79, while the more actively traded December WTI contract fell 72 cents to $97.82.
The retreat followed reports about Pakistan intensifying its diplomatic efforts for a durable peace between Iran and the US.
However, the lack of a clear diplomatic breakthrough has left oil markets exposed to further developments in the conflict.
Oil traders are watching for signs of ship attacks, export interruptions and damage to production or transport facilities.
US officials are also working with international refiners to increase fuel output as diesel shortages push prices higher.
Expected declines in US crude and petroleum-product inventories additionally supported prices.
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The market’s immediate direction will depend on whether shipping and infrastructure threats intensify or diplomatic efforts produce tangible progress.
For oil-importing countries, sustained high crude prices could raise import bills, put pressure on currencies and complicate efforts to contain inflation.
Oil prices underwent an extraordinary reversal in 2026 as the US-Israeli war against Iran, which began on February 28, disrupted supplies and threatened shipping through the Strait of Hormuz.
The strait normally carries about one-fifth of global oil consumption. Brent crude, around $70 a barrel in February before the war, rose to $126.41 in April in futures trading as the conflict escalated. The physical Brent prices climbed even higher during periods of acute scarcity.
Prices subsequently retreated, with Brent futures falling below $80 in August as exports partially recovered, although the recovery remained vulnerable to renewed attacks and interruptions.
By October, fresh threats to tankers, Saudi energy infrastructure, and regional shipping routes drove Brent back toward $110 a barrel, while US West Texas Intermediate crude remained lower.
The prolonged conflict has raised freight and insurance costs, tightened refined fuel supplies, particularly diesel, and increased inflationary pressures worldwide.
Markets remain highly sensitive to developments around Hormuz, Russian energy supplies and diplomatic efforts, leaving prices vulnerable to sharp swings even when immediate supply concerns temporarily ease.
