Oil prices climb as Strait of Hormuz remains effectively shut

Oil prices have climbed about 14% in the past week as shipping through the Strait of Hormuz remains effectively shut amid the Iran war, according to IOL.

Markets react to supply disruption

Both main crude contracts rose on Wednesday and have increased by roughly 14% over the past week, IOL reports. Traders have been monitoring the situation closely as the closure of the Strait of Hormuz has tightened perceptions of global oil supply.

Price levels

At around 4:10am (SA time), IOL recorded benchmark prices as:

• West Texas Intermediate: up 0.7 percent at $83.78 per barrel
• Brent North Sea Crude: up 0.6 percent at $89.40 per barrel

Commentary on supply risks

Analysts cited by IOL linked the price surge to the continued shutdown of the Strait of Hormuz and to stalled talks between the US and Iran. As IOL notes, traders have been spooked by the lack of progress on reopening the crucial waterway.

“Crude oil prices have surged in the last few days because the Strait of Hormuz remains effectively shut, and there are no signs of progress between the US and Iran,” wrote Forex.com’s Fawad Razaqzada.

What traders are watching

IOL reports that market participants are watching developments around diplomacy and any reports of progress to reopen the strait, as well as upcoming US inflation data that could influence central bank policy and broader market sentiment.