Brent settled up nearly 4% at around $103 a barrel and WTI rose about 2% to around $92 on Wednesday, as stalled US-Iran diplomacy over the Strait of Hormuz outweighed a surprise build in US crude stocks. Iran's security chief said the strait stays shut until Tehran's conditions are met, even as an Iranian official suggested it could reopen within a week.
Diplomacy stalls over Hormuz
Brent settled up nearly 4% at around $103 a barrel, while WTI gained about 2% to around $92, rebounding after both benchmarks slipped to multi-week lows earlier in the week. Tehran is still reviewing Washington's response to its proposal to end hostilities, a senior Iranian official told Reuters, adding that many differences remain even as talks continue.
A reopening of the Strait of Hormuz and the lifting of the US naval blockade on Iran were discussed in indirect talks on Tuesday, and the same Iranian official suggested the strait could reopen within a week if the US eased military pressure. Iran's security chief Mohsen Rezaei took a harder line, saying Hormuz would stay shut until Iran's conditions are met.
Diesel whipsawed on export-ban confusion
Diesel was the most volatile part of the complex. Energy Secretary Chris Wright said a blanket export ban would not work and favored a voluntary approach, before Politico reported the administration was preparing a 90-day ban. A White House official later rejected that report, and diesel futures swung sharply on the conflicting headlines before settling marginally lower.
Inventories rise despite the rally
Weekly data drew a muted response even as it ran against the rally's logic. US commercial crude inventories rose by around 3 million barrels to about 426 million barrels in the week to September 18, against expectations for a small draw. Gasoline stocks fell by around 1.7 million barrels, a larger decline than forecast, while distillate inventories drew by around 0.4 million barrels.
Supply signals had pressured crude oil prices earlier in the week. Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, after drone attacks it blamed on Iraqi militia forced a shutdown on September 11. Iraq, meanwhile, said it is exporting more than 3 million barrels per day.
The broader backdrop added pressure: US Treasury yields reached 5%, a level weighing on risk sentiment beyond energy. For now, oil remains anchored to Hormuz — any credible path to reopening the strait would likely weigh on prices, while continued deadlock keeps the geopolitical risk premium in place.
Source: Investinglive RSS Breaking News Feed
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