Brent crude held above $103 a barrel early Wednesday as a sharp recovery in oil flows through the Strait of Hormuz offered some relief to a market still grappling with the effects of the prolonged Iran conflict and uncertainty over the waterway's future.
Brent crude hovered around $107 a barrel on Tuesday, extending gains as uncertainty over the US-Iran conflict and the future of the Strait of Hormuz continued to keep a substantial risk premium in oil markets.
Oil prices climbed sharply on Monday, with Brent crude rising $2.59 to around $106.90 a barrel, as uncertainty over US-Iran diplomacy renewed concerns about the future of oil shipments through the Strait of Hormuz.
Oil exports through the Strait of Hormuz are rebounding this month despite continued restrictions on shipping, with Saudi Arabia sharply increasing shipments through the strategic waterway after attacks disrupted its main pipeline route to the Red Sea, according to data from energy intelligence firm Kpler.
Qatar expects its massive LNG expansion to begin producing in the first half of 2027, but has decided against building pipelines to bypass the Strait of Hormuz. The first production train at North Field East (NFE), the initial phase of Qatar’s LNG expansion, is expected to come online in the first half of 2027, Energy Minister and QatarEnergy CEO Saad Sherida Al-Kaabi said at the Qatar Economic Forum.
The United States carried out a fresh wave of strikes against Iranian military targets on Tuesday, while Iran retaliated with missile attacks targeting US-linked positions and activating air defences across several Gulf states.
Regional diplomatic efforts to ease the crisis around the Strait of Hormuz appeared to stall on Monday after a meeting between Iran and other Gulf countries was postponed, as fresh attacks on shipping and Saudi Arabia's closure of a key oil pipeline heightened concerns over global energy supplies.
Global oil markets face a fresh supply shock after Saudi Arabia shut down its 1,200-km East-West Pipeline following multiple drone attacks, as continuing attacks on shipping in the Strait of Hormuz and a widening Houthi offensive in the Red Sea threaten to disrupt vital energy routes on both sides of the Arabian Peninsula.
Oil prices surged to their highest levels since May on Friday as the widening US-Iran conflict and a rapid Houthi advance in Yemen raised fears of a prolonged disruption to global crude supplies through the two strategic waterways of Hormuz and Bab al-Mandeb.
Iran and Oman have signalled that they are close to reaching an agreement on arrangements for commercial navigation through the Strait of Hormuz, raising hopes of a breakthrough in the crisis that has disrupted one of the world's most important energy corridors.
