Oil Prices Rise for Fourth Day Amid Conflicting Reports on Strait of Hormuz

Oil prices edged higher in early Wednesday trade, continuing a multi-day rally fueled by supply uncertainty in the Middle East. The market is closely monitoring conflicting messages from the U.S. and Iran over the status of the vital Strait of Hormuz shipping lane.

By 0004 GMT, international benchmark Brent crude futures had climbed 0.29%, or 26 cents, to $91.28 a barrel. U.S. West Texas Intermediate (WTI) crude futures were up 37 cents to $85.31 a barrel. Both contracts settled at their highest levels since July 24 on Tuesday as hopes for a diplomatic resolution faded.

Geopolitical Tensions Drive Uncertainty

The immediate catalyst for the price gains is the lack of clarity surrounding the Strait of Hormuz. U.S. President Donald Trump on Tuesday insisted the waterway was open, directly contradicting an assertion from Iran that it remained shut to shipping. The diplomatic stalemate follows the expiration of a temporary ceasefire on Monday.

Adding to market jitters, a senior Iranian official told Reuters that the country was shifting to a "fully offensive" military posture. This development has heightened concerns about potential disruptions to the significant volume of global oil supply that transits through the strait.

Shippers Reroute and Await Data

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In response to the escalating risks, some market participants are already altering their logistics. Iraq's cabinet has approved new mechanisms for exporting its crude via alternative outlets, with new contracts set to run for three months starting September 1, according to a government statement.

Furthermore, Reuters reported that two major Chinese shipping companies have ceased sending oil tankers through the Strait of Hormuz and the Bab al-Mandeb strait, citing industry executives and ship tracking data. These vessels are reportedly collecting oil cargoes from outside the Gulf region to avoid the conflict zone.

U.S. Inventory Watch

Traders are also looking ahead to official U.S. inventory data. Preliminary figures from the American Petroleum Institute, cited by market sources on Tuesday, showed a decrease in crude oil and distillate stocks last week, while gasoline inventories rose.

The U.S. Energy Information Administration (EIA) is scheduled to release its official weekly report at 10:30 a.m. ET. A Reuters poll of analysts indicates an expected crude stock draw of approximately 600,000 barrels for the week ended August 14.