Oil prices climbed on Wednesday, extending their recent advance and moving close to a two-week high as the U.S. and Iran remained divided over reopening the Strait of Hormuz.
Fresh attacks by Yemen’s Iran-backed Houthis on shipping in the Red Sea added to concerns that supply disruptions across West Asia could persist for longer.
Brent oil futures rose 0.6% to $89.45 a barrel by 00:55 ET (04:55 GMT), while West Texas Intermediate crude futures gained 0.7% to $83.77 a barrel.
Hormuz negotiations stall as Houthis target Red Sea shipping
Shipping activity through the Strait of Hormuz remained limited as Washington and Tehran made little progress towards an agreement. Tensions increased after the U.S. said it had attacked a vessel in the Gulf of Oman that it claimed was heading towards Iran.
Tehran indicated earlier this week that Hormuz would stay closed unless Washington accepted its demands for reparations, conditions that U.S. President Donald Trump strongly rejected.
The strait remains a major source of uncertainty for oil markets because it carried around 20% of global oil supplies before the conflict began.
Supply concerns were also heightened by continued Houthi attacks on ships in the Red Sea and Bab el-Mandeb Strait this week, following the Iran-backed group’s declaration of a naval blockade against Saudi Arabia.
The developments offered little indication that the conflict in West Asia was easing, keeping traders focused on the risk of further disruption to crude supplies and providing additional support to oil prices.
U.S. Strategic Petroleum Reserve falls below 300 million barrels
The U.S. Strategic Petroleum Reserve dropped below 300 million barrels last week, according to Department of Energy data released this week.
Inventories in the SPR declined by 6.1 million barrels to 298.7 million barrels.
The reserve, which was created to provide emergency oil supplies, has been steadily drawn down this year as the U.S. sought to offset disruptions linked to the Iran conflict.
President Donald Trump ordered the release of 172 million barrels from the reserve in March in response to the conflict.