Oil prices fluctuated during Thursday’s trading session (November 12) as production in the Middle East increased, while the risk of shipping disruptions through the Strait of Hormuz persisted. Brent crude stood at US$92.35 per barrel, while WTI was at US$86.17 per barrel, with both benchmarks swinging between gains and losses throughout the day.
Oil prices had previously faced significant downward pressure this month, driven by a recovery in supply flows from the Middle East and growing hopes for an end to the conflict. However, the prospect of peace remains uncertain after Iran asserted that it would not hand over its enriched nuclear material—a key demand from Washington during the negotiations.
Risks to oil shipments have not fully subsided. Iran reported that two oil tankers experienced explosions while navigating what were described as "unofficial" routes within the Strait of Hormuz. This situation highlights that, even as production begins to recover, energy distribution channels remain exposed to geopolitical risks.
On the supply side, Saudi Arabia’s production surged by 26% in October, reaching one of its highest monthly levels in recent years. Iraq also ramped up production to its highest level since the onset of the war. These production increases have reignited concerns regarding a potential global oil surplus.
Nevertheless, oil flows from the region continue to rely on alternative routes to bypass the Strait of Hormuz. Uncertainty surrounding Iran’s nuclear program, frozen assets, and a U.S. naval blockade have kept a "geopolitical risk premium" embedded in the market.