Crude oil futures edged higher on Tuesday as uncertainty over exports through the Strait of Hormuz and broader Middle East tensions lifted risk premia, pushing Brent and WTI to their highest levels since late July.
Brent crude futures rose 87 cents, or nearly 1%, to $91.89 a barrel by 11 a.m. ET, while U.S. West Texas Intermediate (WTI) crude gained $1.17, or 1.4%, to $86.11. Both benchmarks advanced about 1% on Wednesday, trading near three-week peaks.
The upward momentum reflects concerns over potential disruptions to one-fifth of global oil and liquefied natural gas flows through the Strait of Hormuz, a critical chokepoint. Tensions escalated after a temporary ceasefire between the U.S.-Israel coalition and Iran expired on Monday. U.S. President Donald Trump stated on Tuesday that no negotiations were underway with Iran and that the strait remained open, though an unnamed senior Iranian official told Reuters the country was shifting to a "fully offensive" military posture amid diplomatic deadlock.
Geopolitical risks were compounded by disruptions to Russian oil shipments from the Black Sea port of Novorossiysk, where outflows fell to about 2.3 million barrels per day in the first half of August, 15% below initial loading plans. Analysts noted that refiners globally have been securing crude supplies amid tight fuel markets, exacerbated by Ukraine’s attacks on Russian refining facilities.
In the U.S., crude inventories climbed by 4.4 million barrels to 428.8 million last week, according to Energy Information Administration data. Refinery utilization rates also increased by 1 percentage point to 97.2%, signaling strong demand.
Market participants highlighted the elevated risk premium in prices. Dennis Kissler, Senior Vice President of trading at BOK Financial, said crude futures remained supported by persistent Middle East tensions, including the UAE’s decision to sever financial ties with Iran following recent missile strikes. Ahmad Assiri, research strategist at Pepperstone, noted that Brent’s rise above $91 a barrel suggested traders were pricing in the potential for prices to return to three-digit levels.
