Oil prices rebounded during Wednesday’s trading session (November 11) after previously hitting a two-month low. Brent crude is now trading at US$92.03 per barrel, while WTI stands at US$86.72 per barrel. The market is currently caught between hopes for a de-escalation of the US-Iran conflict and an uptick in attacks on vessels in the Strait of Hormuz.
Attacks on shipping lanes have once again captured market attention following reports of several incidents. Data indicates that there were 37 attacks on vessels throughout October—the highest monthly figure since the conflict in the Middle East began. Consequently, investors remain wary of potential disruptions to the flow of oil through this strategic waterway.
Meanwhile, the outlook for US-Iran diplomacy remains a critical factor for oil price trends. Even if an agreement is reached, the resumption of oil flows through the Strait of Hormuz would not be immediate; significant challenges remain, including the need for mine clearance, rising insurance costs, and the willingness of shipowners to return to the route.
Supply-side factors are also exerting pressure on oil prices. Data from the American Petroleum Institute shows that US crude inventories increased by approximately 9 million barrels for the week ending November 6. At the same time, Russia’s oil refining capacity has reportedly fallen by about 30% since late October, following drone attacks by Ukraine.
Newsmaker Analysis: Oil prices remain caught in a tug-of-war between hopes for an end to the conflict and the risk of supply disruptions. As long as attacks near the Strait of Hormuz persist, a geopolitical risk premium is likely to continue supporting prices. However, should diplomatic efforts between the US and Iran lead to an agreement—and should oil flows return to normal—pressures stemming from an oversupply could once again cap any gains in oil prices. (srh)
Source: Newsmaker.id