Oil prices rebound as Iran tensions threaten renewed supply disruptions

Oil prices rose sharply on Wednesday, November 11, recovering from two-month lows as renewed tensions between Washington and Tehran raised doubts about a diplomatic resolution to the conflict and revived concerns over Middle Eastern energy supplies.

The rebound followed two consecutive sessions of heavy losses, when expectations of reduced US military operations against Iran encouraged traders to unwind part of the geopolitical risk premium embedded in crude prices.

Price overview

As of 12:32 GMT, brent crude futures traded near $93.31 per barrel, rising approximately 1.99%, after moving between $90.75 and $93.61.

US West Texas Intermediate (WTI) crude futures traded around $87.34 per barrel, advancing approximately 1.51%, after touching a session low of $85.83.

Iran tensions return to focus

Oil prices recovered as hopes for an imminent agreement between Washington and Tehran weakened.

Iranian officials rejected the possibility of transferring enriched nuclear material abroad, complicating prospects for negotiations aimed at ending the conflict.

Meanwhile, continued attacks on commercial vessels near the Strait of Hormuz reinforced concerns about the security of regional oil shipments.

The strategic waterway remains critical to global energy supplies, with shipping disruptions keeping transportation and insurance costs elevated.

Supply risks support prices

Fresh disruptions to Russian energy infrastructure added another source of uncertainty, following Ukrainian drone attacks targeting refining facilities.

However, expectations of recovering Middle Eastern exports and increased production from major oil producers continued to limit the broader recovery.

US monetary policy adds uncertainty

Stronger-than-expected US inflation figures have reinforced expectations of another Federal Reserve interest rate increase in December.

Higher borrowing costs could weaken economic activity and fuel demand, creating additional pressure on crude prices.

Market outlook

Brent faces immediate resistance near $93.60, followed by $95, while support stands around $91.50.

WTI could encounter resistance near $88, with initial support around $85.80.

Further developments involving Iran and shipping through the Strait of Hormuz are likely to remain the principal drivers of oil prices in the near term.