Oil prices posted gains during Wednesday morning trading, recovering from a two-month low. Brent crude futures rose $1.04, or 1.1%, to $92.53 a barrel, while WTI crude rose 67 cents, or 0.8%, to $86.71 a barrel. The increases follow a drop of more than $3 a barrel in the previous trading session, which was partially offset by conflicting reports regarding diplomatic contacts. The market is currently influenced on one hand by expectations of easing military tensions between the US, Israel, and Iran, and on the other by operational risks in shipping routes.
According to data from the Washington Institute for Near East Policy, 37 vessels were attacked in the Middle East in October, the highest monthly figure since the beginning of the fighting in the region. November data does not indicate a decrease in the scope of incidents, as the United Kingdom Maritime Trade Operations (UKMTO) reported an attack on a tanker northwest of Lima off the coast of Oman, while simultaneously the Islamic Revolutionary Guard Corps in Iran stated that two tankers caught fire after striking sea mines in the strait.
According to a review by LSEG Oil Research, even if a diplomatic agreement is reached, the return of vessel traffic to its regular course depends on mine clearance, insurance costs, and the willingness of shipowners to take risks.
Sparta Commodities noted that the conclusion of the US midterm elections and increased oil flow from the Middle East create downward pressure, but Iran's willingness to meet US demands remains the central variable affecting the price of oil.