Oil prices jumped on Wednesday with Brent trading above $100 a barrel, erasing earlier losses following reports of gunfire attacks on at least three container ships in the Strait of Hormuz. The Brent crude futures LCOc1 were up $1.59, or 1.6%, at $100.07 a barrel at 0842 GMT. West Texas Intermediate futures CLc1 rose $1.51, or 1.7%, to $91.18.
The Strait of Hormuz, until the Iran war began at the end of February, was the channel for about 20% of global oil and liquefied natural gas supplies. In Europe, Ukrainian President Volodymyr Zelenskiy said the Druzhba oil pipeline pumping Russian oil is ready to resume operation.
Earlier, U.S. President Donald Trump had said he would indefinitely extend the ceasefire with Iran, hours before its expiry, to allow talks to continue to end a war that has killed thousands and shaken the global economy.
The recent surge in oil prices is likely to have a ripple effect on the global economy, particularly for countries heavily reliant on imported oil.
Industry analysts are closely watching the situation in the Strait of Hormuz, as any disruption to oil supplies could lead to significant price increases.
The EIA will publish inventory data later today, which may provide further insight into the impact of the recent tensions on global energy markets.
If confirmed, the draws and U.S. weekly exports of both crude oil and refined products remain robust, this will be taken as confirmation that consumers in Europe and the Far East are scrambling to secure oil supplies wherever, whenever, and however they can.
The recent surge in oil prices is a clear indication of the increasing uncertainty in global energy markets.
As tensions in the Strait of Hormuz continue to escalate, it remains to be seen how long the current ceasefire will last and what impact it will have on global oil prices.
The recent surge in oil prices is a clear indication of the increasing uncertainty in global energy markets.
