Crude oil prices moved higher on Wednesday, reaching their highest levels in nearly four weeks as escalating tensions in the Middle East and continued restrictions on shipping through the Strait of Hormuz kept supply concerns elevated. Brent crude settled up $0.60, or 0.7%, at $91.62 per barrel, while WTI gained $0.89, or 1.1%, to settle at $85.83 per barrel. Both benchmarks closed at their highest levels since July 24.
Market attention remained focused on the Strait of Hormuz after the United Arab Emirates suspended financial and economic transactions with Iran following recent missile attacks. Iran continues to maintain that the waterway is closed, while the United States has said the strait is open. Shipping activity remains severely restricted, with only six commodity vessels crossing on Tuesday, down from nine the previous day and below the 10-day average of 11 vessels.
The continued lack of clarity surrounding access through the strait is keeping a significant geopolitical risk premium in crude prices. Roughly one-fifth of global oil and liquefied natural gas supplies normally pass through the waterway, making sustained restrictions a major concern for global energy markets.
Supply disruptions are also affecting Russian exports. Shipments from Russia’s western ports averaged approximately 2.3 million barrels per day during the first half of August, about 15% below the initial loading plan, as disruptions at the Black Sea port of Novorossiysk continued to interfere with exports.
U.S. inventory data provided some counterweight to the supply concerns. Commercial crude inventories increased by 4.4 million barrels to 428.8 million barrels last week, easing some concerns over domestic supply availability. At the same time, strong refining margins and continued disruptions to Russia’s refining sector have encouraged refiners to maintain strong demand for crude. U.S. refinery utilization increased by one percentage point to 97.2%.
With Middle Eastern and Russian supply disruptions continuing to support prices, crude remains elevated despite rising U.S. inventories. Brent’s move above $91 per barrel reflects the growing risk premium surrounding the Strait of Hormuz, while continued high refinery utilization is providing additional support to demand for crude.