Oil prices rise as attacks dent hopes for Strait of Hormuz reopening

Oil prices have jumped as attacks on shipping in the Middle East cast doubt on prospects for a breakthrough in negotiations to reopen the Strait of Hormuz.

Brent crude rose more than 2 percent overnight into Wednesday, taking the international benchmark to close to $90 a barrel.

Brent futures for October delivery stood at $89.53 as of 08:00 GMT, up about 24 percent compared with before the start of the US-Israel war on Iran in late February.

“Markets have not completely lost hope for a deal, but confidence is clearly eroding,” Tim Waterer, chief market ‌analyst at  Australia-based KCM Trade in Sydney, told Al Jazeera.

“The longer talks drag on without visible progress, and the more complex the reported demands become, the greater the scepticism that a workable agreement can be reached quickly,” Waterer said.

“Optimism from earlier in the month is steadily being replaced by a more cautious, risk-premium-driven stance.”

Yemen’s internationally recognised government on Tuesday accused the Iran-aligned Houthis of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb strait, which divides the Arabian Peninsula from the Horn of Africa.

Yemen’s coastguard said the victims included two members of the security forces who had been deployed on a rescue mission following the initial attack.

US Central Command said later in the day that it attacked and disabled a Panama-flagged cargo vessel after it attempted to break the US blockade of Iranian ports.

Oil prices have seen an upward trajectory over the past week amid conflicting signals over the prospects of a deal on reopening the Strait of Hormuz, which carried about one-fifth of global oil supplies before the war.