Oil ticks up as traders weigh Iran mediation efforts
US tells several Persian Gulf nations to prep for a short, intense military campaign against Teheran
Oil prices rose as traders considered whether the US and Israel might resume military action against Iran. Brent crude surged 1.3% to surpass $115 a barrel, while West Texas Intermediate neared $103. The US had warned several Persian Gulf countries to prepare for a brief, intense military campaign targeting Tehran, heightening concerns about potential supply disruptions.
After trading closed, Brent briefly dipped below $114, but quickly recovered amid hopes for a breakthrough in peace talks. US Vice-President JD Vance had reached out to Iranian hardliner Mohsen Rezaei in an effort to revive negotiations. The news came as traders analyzed results from US midterms and Israel's recent election, both of which could impact the Middle East situation.
Analysts noted that oil prices were sensitive to developments in the Persian Gulf, particularly regarding potential US military action after the elections. Brent futures had climbed for weeks, even as global oil supplies remained robust and underlying market conditions showed signs of weakening. Some traders purchased oil options, anticipating higher prices due to rising geopolitical tensions.
The US had also dispatched additional forces, including a third carrier group, to the region. While Iran's Foreign Minister indicated a willingness to continue diplomacy, traders remained skeptical, viewing the offer with caution. Meanwhile, Saudi Arabia faced repeated attacks from Houthi rebels backed by Iran, causing concern over the safety of its oil infrastructure.
US crude inventories continued to decline, with the lowest gasoline stocks on record, raising the risk of persistent high gas prices in important states leading up to the midterm elections.
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.
