Brent crude climbed to a four-week high as the United States and Iran remain deadlocked over the Strait of Hormuz, even as Axios reports the US military has quietly restored close to half of pre-war oil flows through a corridor off Oman. US commercial crude stocks also rose for a third straight week.
Brent crude futures expiring in October rose 0.6% to $91.54 a barrel, their highest level since July 24. WTI futures for the same month climbed 0.3% to $84.27 a barrel, touching their highest since July 31.
Trump claims control, shipping data tells a different story
President Trump said on Tuesday that no talks with Iran were ongoing or scheduled and that a US naval blockade remained in force, while Tehran denied any negotiations. According to Investing.com: "We have possession, complete control of the strait," Trump told reporters on Wednesday. Iran has demanded the US halt hostilities across all fronts and unfreeze Iranian assets before it will reopen the strait, and an interim memorandum of understanding between the two sides, inked in mid-June, expired this week after already having collapsed in July.
Shipping data, however, continued to show fewer transits. Confirmed vessel crossings dipped 17% from the previous day to 10 on Tuesday, Kpler data showed, after sliding to just three the previous Sunday. The United Arab Emirates' foreign ministry separately said it had halted all trade, commercial exchange and financial transactions with Iran after detecting two Iranian ballistic missiles aimed at maritime navigation.
A quiet corridor moves 10 million barrels a day
Away from the public standoff, the US military has for several weeks run a shipping corridor through a southern channel of the strait off the Omani coast, Axios reported, citing two US officials. The operation moves close to 10 million barrels of oil a day out of the Gulf, roughly half of pre-war volumes. Each night, 15 to 20 tankers transit in coordinated convoys, with a task force based at Fort Bragg coordinating the scheduling with regional Gulf partners.
The corridor's viability follows a two-week US Central Command campaign that degraded Iran's radar and maritime surveillance. US Air Force jets have intercepted a substantial share of Iranian attacks on tankers, including eight drones and two cruise missiles shot down in one recent incident, though officials acknowledge some vessels have still been struck.
Inventories build for a third week
US commercial crude oil inventories excluding the Strategic Petroleum Reserve rose by 4.4 million barrels in the week of August 14 to 428.8 million barrels, the highest since May 29, versus expectations for a 200,000-barrel build, the EIA said. Overall inventories including the SPR fell by 900,000 barrels to 722.2 million barrels, the lowest level since April 1984. Stocks at the Cushing, Oklahoma hub fell by 1.3 million barrels to 21.3 million barrels, the EIA said.
Sources: Investing.com, Investinglive
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