Oil rebounds as Hormuz shipping attacks blunt hopes for Iran truce

INTERNATIONAL BUREAU —Oil prices rose on Wednesday from the ‌previous session's two-month lows, as the market swung between hopes for a de-escalation in the US-Israeli war on Iran and concerns about attacks on shipping in the Strait of Hormuz. Also on Wednesday, a regional governor said a drone attack caused a fire in the port area of ​Ust-Luga by the Baltic Sea in northwest Russia, injuring three workers.

Brent futures climbed $1.04, or 1.1%, to $92.53 a barrel ​at 0420 GMT. US West Texas Intermediate crude rose 67 cents, or 0.8%, to $86.71. Recent data showed ⁠little sign of fewer attacks in November, after 37 ships were attacked in October, the highest monthly total since the ​start of the Middle East war, according to data from the Washington Institute for Near East Policy.

"There has been an ​increase of vessel attacks in the Gulf shipping lanes amidst uncertainty of the diplomacy talks," said June Goh, senior analyst at Sparta Commodities. "With the US midterms well over and more crude flows out of the Middle East, there seems to be more bearish tones to the ​oil price." Read: Oil prices slide 2% to two-month low She added that the top driver for oil is the extent to which Iran will come to the table ​with US demands to reach a diplomatic agreement.

A tanker was struck northeast of Lima in Oman, the United Kingdom Maritime Trade Operations ‌agency said ⁠on Tuesday. Iran's Revolutionary Guards Navy said in a separate statement on Tuesday that two tankers caught fire after hitting naval mines on the "unauthorised route" in the strait. "Even in the event a deal is struck, an increase in flows through the waterway would still depend on mine clearance, insurance costs and whether or not shipowners would even be willing to ​take the risk," LSEG Oil Research ​said in a November ⁠10 note.

In the previous session, oil prices initially fell by more than $3 a barrel after US officials downplayed the need for further military strikes against Iran, though some of the losses were ​clawed back after an Iranian security official said no talks were taking place between the two ​sides. Read more: Three arrested in major oil theft case Meanwhile, US crude oil ⁠stocks rose in the latest completed week, market sources said, citing data from the American Petroleum Institute.

Crude stocks rose by 9 million barrels for the week that ended on November 6, the sources said. In Russia, oil refining capacity has been reduced by ⁠about 30% ​since late October following renewed Ukrainian drone attacks, industry sources said. Russian ​and Ukrainian officials met in Abu Dhabi on Tuesday for their first peace talks since February as US President Donald Trump's envoys launched a fresh push ​to end the war.