Oil Prices Near $90 As Hormuz Talks Stall Amid Shipping Attacks

Oil prices have risen as attacks on shipping in the Middle East raise fresh concerns over the prospects of reopening the Strait of Hormuz.

According to Al Jazeera, Brent crude gained more than two per cent overnight into Wednesday, pushing the international benchmark close to $90 a barrel. Brent futures for October delivery stood at $89.61 as of 03:00 GMT, representing an increase of about 24 per cent from levels before the US-Israel war on Iran began in late February.

“Markets have not completely lost hope for a deal, but confidence is clearly eroding,” Tim Waterer, chief market analyst at Australia-based KCM Trade in Sydney, told Al Jazeera.

“The longer talks drag on without visible progress, and the more complex the reported demands become, the greater the scepticism that a workable agreement can be reached quickly,” Waterer said.

“Optimism from earlier in the month is steadily being replaced by a more cautious, risk-premium-driven stance.”

Yemen’s internationally recognised government on Tuesday accused the Iran-aligned Houthis of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb Strait, which separates the Arabian Peninsula from the Horn of Africa.

Yemen’s coastguard said two of those killed were security personnel deployed on a rescue mission following the initial attack.

Later on Tuesday, US Central Command said it had attacked and disabled a Panama-flagged cargo vessel after it attempted to breach the US blockade of Iranian ports.

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Oil prices have maintained an upward trajectory over the past week amid mixed signals about negotiations to reopen the Strait of Hormuz, a key waterway that carried about one-fifth of global oil supplies before the conflict.

Qatar’s Foreign Ministry said on Tuesday that talks between Oman and Iran over the strait had reached an advanced stage, with Doha calling for the waterway to be reopened “as soon as possible”.

Iran, however, has maintained that its talks with Oman are separate from the reopening of the strait. Iranian officials have said the waterway will remain closed until the United States agrees to conditions including war reparations and the lifting of sanctions.

US President Donald Trump on Tuesday claimed that Washington had total control of the strait, although maritime traffic remains far below pre-war levels.

According to maritime intelligence firm Windward, only 10 vessels passed through the waterway on Monday, compared with about 130 daily transits before the war.

Before Tehran effectively closed the strait in response to US and Israeli strikes, about 20 million barrels of oil and petroleum products passed through it each day.

US Energy Secretary Chris Wright said on Tuesday that the seven-day average of oil leaving the strait had recovered to about nine million barrels per day, attributing the increase to the “coordinated efforts” of the US military and Gulf allies.

Market analysts have questioned the figure, noting that it is considerably higher than estimates from tanker-tracking platforms.

Commodity Context, an oil market research firm founded by Toronto-based researcher Rory Johnston, estimated that the moving average peaked at about seven million barrels per day last week.

In its latest market outlook released on Tuesday, the US Energy Information Administration said it did not expect Middle Eastern oil production to return to near pre-conflict levels until early 2027. It also projected that Brent crude would average $87 a barrel in 2026.

“OPEC crude production can only increase once there is a normalcy in flows in both directions through the Strait of Hormuz,” June Goh, a senior oil market analyst at Sparta Commodities in Singapore, told Al Jazeera.

“Thus, fundamentally, oil prices remain supported at the $85-90 per barrel level barring any new headlines on renewed optimism over the diplomatic talks that have not progressed significantly.”