Oil Prices Rise More Than 1% as Middle East Tensions Threaten Supplies

Oil prices climbed more than 1% on Wednesday as escalating tensions in the Middle East heightened concerns about supply disruptions, while a decline in US crude and fuel inventories provided additional support to the market.

Brent crude futures rose $1.61, or 1.5%, to $110.40 a barrel as of 9:30 a.m. Saudi time. US West Texas Intermediate crude gained $1.45, also 1.5%, to $99.27 a barrel.

Prices had fallen in the previous session after Iranian President Masoud Pezeshkian discussed mediation efforts with Pakistan’s army chief during a meeting in Tehran. Brent had reached a five-month high before retreating as traders assessed the prospects for diplomatic progress.

Suvro Sarkar, head of energy research at DBS, said oil markets had experienced significant volatility over recent sessions, reflecting a combination of profit-taking, hopes for a negotiated settlement and concerns that any agreement remained distant.

He also pointed to data from the American Petroleum Institute (API), which indicated continued declines in US crude and petroleum product inventories.

Market sources citing API figures said US crude stocks fell by 4.9 million barrels in the week ended October 16, adding to concerns about available supplies.

Diplomatic efforts remained uncertain. Iranian media outlet Nournews reported on Tuesday that Tehran had told Pakistan’s army chief it would not hold talks with Washington until its demands were met. The outlet also reported that a Qatari delegation had arrived in Tehran, although there was no official confirmation of the reports.

Security concerns have also intensified across regional shipping routes. Maritime intelligence firm Kpler said at least 18 vessel attacks had been recorded over the previous two weeks.

Analysts at LSEG warned that Iran was targeting tankers beyond the Strait of Hormuz, extending risks into the Gulf of Oman. The attacks threatened crude oil loadings from Gulf facilities and ship-to-ship transfers used to support regional exports.

The Houthis on Monday claimed responsibility for attacks on a Saudi Aramco facility in Yanbu, the Shaybah oilfield and the airports in Riyadh and Abha. Separately, the death toll from a Houthi attack on a training camp belonging to Yemeni government forces rose to 73, according to reports.

Iranian Foreign Minister Abbas Araqchi said in a television interview aired on Tuesday that Tehran had not received a response from Saudi Arabia or the Houthis to its offer to help broker peace talks.

In the United States, two Energy Department officials said Washington was working with refiners worldwide to increase fuel production as a diesel shortage pushed prices higher.

The combination of uncertain diplomacy, maritime security risks and falling US inventories has kept traders focused on the possibility of further supply disruptions, leaving oil prices vulnerable to developments across the Middle East.