By: Economy Middle East

Oil prices rose on Thursday as investors weighed the outlook for the U.S.-Iran conflict and concerns over the safety of shipping through the Strait of Hormuz.

As of 5:11 GMT, Brent crude futures edged up 15 cents, or 0.16 percent, to $91.77 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures gained 5 cents, or 0.06 percent, to $84.44 a barrel. Both Brent and WTI benchmarks extended their gains for a fourth consecutive session on Wednesday, closing at their highest levels since July 24.

Middle East tensions keep oil prices elevated

Oil prices remained elevated as sporadic attacks across the Middle East continued to provide support to the market, although the absence of a major escalation limited the potential for a sharper rally. Traders remained focused on developments surrounding the U.S.-Iran conflict, with uncertainty over the prospects for peace talks adding to volatility in the oil market.

Persistent uncertainty over peace talks and renewed tensions between the UAE and Iran could keep prices on a gradual upward path. The UAE’s decision to suspend all financial and economic transactions with Iran until further notice has brought strained relations between the two Gulf oil producers back into focus.

Meanwhile, U.S. President Donald Trump said on Tuesday that no talks were taking place with Iran and that the Strait of Hormuz was open. Iran, however, disputed that assessment and said the strategic waterway remained closed, highlighting the uncertainty surrounding the route that carries a significant share of global oil shipments.

The conflicting statements have kept the Strait of Hormuz at the center of market attention, with traders closely monitoring any developments that could affect the movement of crude through the waterway. Continued uncertainty over the conflict and diplomatic efforts could provide further support to oil prices in the near term.

Hormuz shipping slowdown weighs on market

Traffic through the Strait of Hormuz slowed on Wednesday, according to shipping data, as most shipowners continued to avoid the strategic waterway amid uncertainty over its reopening. The slowdown reflects growing caution among shipping companies as the lack of clear signals on when the blockade imposed during the Iran war could be lifted continues to disrupt normal traffic.

Any prolonged disruption to shipping through the strait could add a significant risk premium to oil prices, particularly if concerns grow over the availability and timing of crude supplies reaching international markets.

Market sentiment was also influenced by U.S. inventory data. The Energy Information Administration said crude and gasoline inventories increased last week, while distillate stockpiles declined. U.S. crude inventories rose by 4.4 million barrels in the week ended August 14, sharply exceeding market expectations for a 600,000-barrel draw.