On Tuesday, U.S. West Texas Intermediate futures rose by 2.7% to $84.36 per barrel, while Brent crude increased by 2.53% to $89.94 per barrel, marking their highest levels this month. The rise in oil prices comes amid a backdrop of reduced expectations for a comprehensive agreement between the U.S. and Iran to reopen the Strait of Hormuz, a vital shipping route for oil.
The Trump administration's recent decision to extend a suspension of a shipping law, which limits the transport of goods between U.S. ports to American vessels, has further complicated the situation. This suspension now applies only to vessels carrying specific energy resources.
Additionally, U.S. crude oil stockpiles have fallen to their lowest levels in over 40 years, intensifying supply concerns. Analysts from ING noted that the oil market is highly reactive to news, with current sentiments suggesting that any potential agreement between the U.S. and Iran remains distant, which could lead to continued upward pressure on oil prices