Oil prices rose on Wednesday amid statements reinforcing expectations that Iran would not back down from its conditions for reopening the Strait of Hormuz, ongoing regional tensions and a decline in US crude inventories.
International benchmark Brent crude futures for December delivery increased 1.5% to $110.46 a barrel at 10.07 a.m. local time (0707 GMT), compared with the previous close of $108.79.
US benchmark West Texas Intermediate (WTI) crude futures for December delivery gained 1.5% to $99.31 a barrel, up from $97.82 at the previous close.
Brent crude, which fell to $105.95 a barrel on Tuesday following reports on diplomatic efforts between the US and Iran and proposals for a compromise reportedly submitted to the parties by Qatar and Pakistan, resumed its upward trend after remarks by Iranian Parliament Speaker Mohammad Bagher Ghalibaf.
Ghalibaf said Tehran would not trust Washington unless the US fulfilled Iran’s conditions for reopening the Strait of Hormuz, increasing uncertainty over oil shipments through the waterway and concerns about global supply, which supported prices.
Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, also said enriched nuclear material would not be taken out of Iran under any circumstances.
The statements reinforced expectations that disagreements between the US and Iran would not be resolved in the short term, putting upward pressure on oil prices.
Meanwhile, the naval forces of Iran’s Islamic Revolutionary Guard Corps said a “super tanker” had struck a sea mine south of the Strait of Hormuz, triggering an explosion.
In a written statement, the IRGC said a vessel known as a “super tanker” had attempted to transit the Strait of Hormuz.
The statement said the tanker had switched off its radar and navigation systems, ignored warnings and attempted to use an “unauthorized” route south of the strait.
The incident heightened concerns that shipping through the waterway, which is critical to global oil trade, could face further disruption, supporting the rise in prices.
Separately, the American Petroleum Institute (API) estimated that US commercial crude inventories fell by around 4.93 million barrels last week, compared with market expectations for a decline of 1.3 million barrels.
The larger-than-expected drop in inventories added to upward pressure on oil prices.
Official US oil inventory data will be released by the Energy Information Administration (EIA) later on Wednesday.