Oil edges up on uncertainty over exports through Hormuz

Oil prices rose in early trading on Wednesday, climbing for a fourth consecutive day due to supply concerns as conflicting statements emerged from Iran and the United States regarding the Strait of Hormuz. Brent crude futures increased by 26 cents, or 0.29%, reaching $91.28 per barrel, while U.S. West Texas Intermediate crude futures gained 37 cents to $85.31 a barrel. On Tuesday, both contracts had recorded their highest levels since July 24 as prospects for peace between the U.S. and Iran diminished.

U.S. President Donald Trump announced on Tuesday that no negotiations were underway with Iran and reaffirmed that the Strait of Hormuz remained open to shipping, a claim contradicted by Iran, which stated that the vital waterway was not yet re-opened. A temporary ceasefire agreement, which had ended on Monday, prompted a senior Iranian official to tell Reuters that Iran was taking action due to the diplomatic impasse; however, there were no reports of fresh attacks by either side on Tuesday.

In response to the uncertainty surrounding the Strait of Hormuz, Iraq's cabinet authorized measures for exporting Iraqi crude through specialized international and local firms and multiple export channels. The contracts under this new arrangement are set to begin on September 1 for a period of three months, according to a statement released after the cabinet meeting.

Additionally, two prominent Chinese shipping companies have ceased sending oil tankers through the Strait of Hormuz and the Bab al-Mandeb strait due to the ongoing Middle Eastern conflict. Instead, they are now collecting oil cargoes outside the Gulf region, according to industry executives, tanker trackers, and a ship broker. In the United States, crude oil and distillate inventories declined last week, while gasoline stocks rose, according to data from the American Petroleum Institute shared by market sources on Tuesday.

The official inventory figures from the U.S. Energy Information Administration are expected to be released at 10:30 a.m. ET (1430 GMT), with analysts surveyed by Reuters anticipating a decrease of around 600,000 barrels in the week ending August 14.