Oil prices hit six-week high on Wednesday

Oil prices climbed to near six-week highs on Wednesday as escalating hostilities between the United States and Iran, alongside threats by Yemen’s Iran-backed Houthi movement to shipping in the Bab el-Mandeb Strait, heightened concerns over disruptions to global oil supplies.

Brent crude futures rose 3.12 per cent to $93.85 a barrel, while US West Texas Intermediate (WTI) gained 3.47 per cent to $87.27 by 0833 GMT. Both benchmarks reached their highest levels since June 11.

The latest gains came after the US military said it had carried out an 11th consecutive night of strikes, while Kuwait reported intercepting Iranian drones. Markets are also closely monitoring risks to the Strait of Hormuz and the Bab el-Mandeb Strait, two critical routes for global energy shipments.

Houthi threats have prompted several oil tankers carrying Saudi crude to divert away from the Red Sea, raising concerns over tighter physical supplies and higher shipping costs.

Meanwhile, preliminary data from the American Petroleum Institute showed US crude and distillate inventories increased last week, while gasoline stockpiles declined, ahead of official US government data due later on Wednesday.

Attribution: Reuters