Oil Prices Rise as Iran Peace Optimism Fades
Crude oil prices reversed their fall from earlier this week as traders grew less optimistic about a peace deal between the United States and Iran amid continuing tanker attacks in the Strait of Hormuz, with a record number of such attacks in October. At the time of writing, Brent crude was trading at $92.43 per barrel, with West Texas Intermediate at $86.62 per barrel, both up from the start of…
Oil prices have climbed higher as hopes for a U.S.-Iran peace agreement dim, despite a surge in attacks on tanker shipments in the Strait of Hormuz, according to recent reports. Brent crude rose to $92.43 per barrel, while West Texas Intermediate reached $86.62 per barrel, both up from the start of the week but still below their October highs.
In October, there were a record 37 attacks in the Strait of Hormuz, according to Reuters, citing the Washington Institute for Near East Policy. Over 130 vessels have been targeted since the start of the conflict, as per the International Maritime Organization. The ongoing attacks on Saudi infrastructure by Houthi rebels further complicate the security situation in the Middle East, limiting the potential for oil prices to drop.
LSEG Oil Research cautioned that even if a peace deal is reached, increased flows through the waterway would depend on factors such as mine clearance and insurance costs. FxPro's chief market analyst, Alex Kuptsikevich, noted that the geopolitical premium on oil is gradually fading as energy flows out of the Persian Gulf improve, as oil has fallen by more than 20% from its late-October highs due to investors pricing out geopolitical risk premiums.
Oil production from OPEC rose to 22.87 million barrels per day in October, close to 90% of February levels, according to a Reuters survey of experts.
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