Washington: Oil prices have risen for the fourth straight day as negotiations between the United States and Iran continue to stall, leaving the global oil market on edge. This ongoing impasse has persisted for nearly six months, exacerbating already volatile economic conditions.
According to National Iraqi News Agency, Brent crude has climbed to approximately $92 a barrel, marking a 4.5% increase over the past three trading sessions, while West Texas Intermediate (WTI) crude is nearing $86. The October delivery of Brent crude rose by 0.9% to $91.87 a barrel early Wednesday, while the September delivery of WTI crude, set to expire on Thursday, increased by 1% to $85.78 a barrel. The more actively traded October contract also saw a 1% rise to $84.91 a barrel.
The geopolitical tension has been further intensified by US President Donald Trump’s assertion that no negotiations are currently ongoing with Tehran. This standoff has significant implications for the Strait of Hormuz, a critical waterway for global oil
shipments. The ongoing conflict has severely disrupted shipping traffic, consequently affecting the global oil supply chain.
Crude oil prices have been on an upward trajectory since the conflict in the Middle East erupted in late February, adding to existing inflationary pressures. Compounding the situation, the ongoing war between Russia and Ukraine has further tightened energy markets, especially after recent attacks on refineries. This has led to a faster rise in prices for refined products, particularly diesel, impacting motorists, truckers, and the industrial sector.
With the absence of talks, the United States is poised to intensify its economic pressure on Iran in an attempt to force a resolution, while maintaining a blockade on Iranian ports. Treasury Secretary Scott Bisnett has indicated that a new set of stringent measures could be announced this week.
In a related development, the United Arab Emirates has declared a suspension of all trade and financial transactions with Iran amid the escalatin
g regional tensions. The UAE, which faces the Persian Gulf from Iran, has often been targeted in attacks, particularly those impacting shipping routes.
In the domestic arena, the American Petroleum Institute has reported a slight decrease in US crude oil inventories, including at the crucial Cushing, Oklahoma, hub. Estimates also suggest a reduction in distillate stocks, which covers diesel, with official data expected later today.
Globally, diesel markets face tight supply conditions, exacerbated by disruptions in Middle Eastern oil flows and Russia’s suspension of exports. The margin for producing industrial fuels from crude oil in the US has reached unprecedented highs, exceeding $100 per barrel. Similarly, in Europe, gasoil prices have surged alongside crude oil, with futures contracts rising over 1% to $1,315.25 per ton, more than doubling since the beginning of the year.