Gulf supply disruption fears push WTI Oil towards $99

• A gain of nearly 1% takes WTI Oil towards $99.00 on Wednesday as its uptrend resumes.
• Supply disruption concerns have intensified amid more attacks on vessels in the Strait of Hormuz and Houthi threats to Saudi Arabian oilfields.
• With their positions still far apart, the US and Iran continue to make no progress in attempts to negotiate.

A rise of about 1% has taken US benchmark West Texas Intermediate (WTI) oil to a session high just a few cents short of $99.00 on Wednesday. Crude has recovered its earlier losses as mounting attacks in the Strait of Hormuz and the continuing threat to Saudi Arabian oilfields fuel concerns over supply disruptions.

According to an announcement on Tuesday by Iran’s Revolutionary Guards Corps (IRGC), two tankers caught fire after striking sea mines in the southern Strait of Hormuz. The vessels had been attempting to pass through the waterway along a route not authorised by Tehran.

Meanwhile, Yemen’s Iran-backed Houthi militias have claimed responsibility for attacks on Aramco oil facilities in Yanbu. Saudi Arabia uses the Red Sea port to bypass the troubled Hormuz corridor.

US-Iran peace efforts fail to secure an agreement

Efforts to reach a peace agreement between Washington and Tehran have yet to succeed. Seeking to mediate between the rivals and avert another round of fighting, a senior Pakistani army official arrived in Tehran on Tuesday. Markets welcomed the development, with crude prices retreating sharply during Tuesday’s US trading session.

Hopes for a rapid peace agreement were dampened by American officials on Wednesday, however. Speaking to US media, US Secretary of State Marco Rubio said securing a peace deal with Iran was extremely difficult. He also said economic pressure on the Islamic Republic would continue until Tehran continues targeting commercial vessels in the Strait of Hormuz.

Speaking to Iranian media, Iranian Foreign Minister Abbas Araghchi said Washington must accept Iran’s conditions before the Strait of Hormuz would reopen. With the two sides caught in this cycle, the conflict is entering its eighth month without a clear end in sight.