Oil rises amid ongoing shipping restrictions through Hormuz Strait

Oil prices rose by more than 1% amid continued restrictions on shipping traffic through the Strait of Hormuz, which overshadowed expectations for the resumption of talks between the United States and Iran aimed at ending the war in the Middle East.

After 45 days since the Iranian Revolutionary Guard announced the closure of the Strait—through which approximately 20% of global oil and liquefied natural gas (LNG) shipments pass—navigation remains unstable despite a two-week truce. Sources indicate that the number of transiting vessels represents only a fraction of the more than 130 daily trips recorded before the outbreak of the war.

Brent crude contracts rose by $1.30, or 1.4%, to reach $96.09 per barrel, after declining 4.6% in the previous session. U.S. West Texas Intermediate (WTI) crude also climbed by $1.01, or 1.1%, to $92.29 per barrel, following a drop of nearly 7.9% in the previous session.

This rise came despite the increase in stock indices on Tuesday as optimism grew regarding a potential resolution to the conflict, with the S&P 500 approaching record highs.

U.S. President Donald Trump stated that talks with Tehran might resume this week after ending without an agreement over the weekend. Meanwhile, the United States has also imposed a naval blockade on Iranian ports, which its forces confirmed has completely halted maritime trade to and from Iran.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, noted that the optimism driven by hopes of a deal has begun to fade. she pointed out that even in the event of a rapid breakthrough and the reopening of the Strait of Hormuz, supply bottlenecks in essential commodities such as oil, gas, fertilizers, and helium could take a long time to recede.

Amid these disruptions, refiners are urgently seeking alternative crude supplies, leading to a rise in price premiums, especially for oil from regions such as the U.S. Gulf Coast and the North Sea. A shipment of WTI Midland for delivery in Rotterdam was traded at a record premium of $22.80 above European benchmarks.

In another development, a U.S. destroyer stopped two oil tankers attempting to leave Iran on Tuesday, according to a U.S. official.

An analyst at SEB bank stated that reopening the Strait does not depend on Washington alone, as Iran has its own calculations. Tehran may view the continued restrictions on oil flows as a strategic leverage tool, whether to obtain compensation, security guarantees, or to achieve political gains ahead of the U.S. midterm elections.

The market may also face further supply shortages after two U.S. administration officials indicated that Washington will not renew a 30-day sanctions waiver for seaborne Iranian oil that expires this week, in addition to the expiration of a similar waiver for Russian oil over the weekend.

Later today, investors await official U.S. inventory data from the Energy Information Administration (EIA). Expectations point to a slight increase in crude oil inventories last week, against a potential decrease in gasoline and distillate stocks.

Sources familiar with American Petroleum Institute (API) data also reported that crude oil inventories in the United States recorded an increase for the third consecutive week.