Oil prices settle near 4-week high as Middle East crisis escalates
Both benchmarks closed at their highest since July 24
Oil prices soared to near four-week highs on Wednesday (Aug 19) as Middle East tensions intensified following the United Arab Emirates' decision to cut all financial and economic ties with Iran. Brent crude futures climbed to US$91.62 a barrel, while US West Texas Intermediate crude futures rose to US$85.83 a barrel. Senior vice-president of trading at BOK Financial, Dennis Kissler, attributed the price surge to ongoing geopolitical tensions in the Middle East.
US President Donald Trump stated that no talks were taking place with Iran, and that the Strait of Hormuz remained open, though Iran claimed the waterway was closed. Iran reportedly moved to a "fully offensive" military stance due to the diplomatic stalemate, potentially targeting European military installations if President Trump escalates the conflict.
The oil market's focus now remains on the Strait of Hormuz, which carries approximately one-fifth of global oil and liquefied natural gas supplies. Ship traffic through the strait slowed to six vessels on Tuesday, down from nine the previous day and below the 10-day daily average of 11. Oil shipments from Russia's western ports also fell to 2.3 million barrels per day in August, 15 percent below initial loading plans, due to disruptions at the Black Sea port of Novorossiysk.
US crude inventories rose by 4.4 million barrels to 428.8 million barrels last week, easing supply concerns. Oil refineries have been purchasing crude barrels due to high margins and tight global fuel supplies, stemming from Ukraine's attacks on Russia's refining sector.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
