WTI Oil hits highs near $91 as risks of an all-out war in the Middle East grow

Crude prices resumed their upside trend on Thursday after some hesitation on Wednesday, with the US benchmark West Texas Intermediate reaching session highs a few cents below $91.00 per barrel, almost 10% up on the week so far.

The resumption of hostilities between the US and Iran this week is pushing Oil prices higher amid growing concerns that the region can slide into an all-out war involving neighbouring countries, which would strain Crude exports from the Gulf countries even further.

US President Donald Trump’s comments affirming that the US can strike Iran “at a much harder and higher level” have not helped to ease tensions. Trump made these remarks warning Iran against retaliation, as Tehran accused the US military of targeting a civilian wedding on Tuesday’s strikes, killing four people, and injuring dozens.

Oil traffic to Hormuz remains limited to a trickle

Meanwhile, sea traffic through the Strait of Hormuz remains limited, despite comments by US Energy Secretary Chris Wright affirming that more than 17 million barrels of Oil crossed the strategic corridor on Monday, which he considered a record traffic since the war started in late February.

Data from ship tracking services, however, contradicts those statements. Kpler traffic monitoring services reported only five ships crossing Hormuz on Monday, the day US and Iran resumed their hostilities, a 50% decline from 10 days before and a marginal percentage of the 130 average ships that used to cross the waterway before the war started.

On Wednesday, data from the US Energy Information Administration (EIA) showed that inventories continue depleting, which contributed to boost prices higher. Commercial Crude Oil stocks declined by 4,45 million barrels in the last week of August, according to EIA data, well beyond the 1.1 million drawdown forecasted by market analysts and following a 0.095 million increase in the previous week.