Brent crude prices were trading around $110 a barrel on Wednesday morning, remaining close to this level for a third consecutive session, as investors weigh persistent supply risks in the Middle East against tentative signs of diplomatic progress. The ongoing conflict in the Persian Gulf continues to support a significant geopolitical risk premium, with recent attacks on vessels in and around the Strait of Hormuz, alongside Houthi strikes targeting Saudi energy infrastructure, raising concerns about further disruptions to regional oil supplies.
Meanwhile, reports of diplomatic contacts involving Iran, Pakistan and Qatar have kept hopes alive for a possible negotiated settlement, although significant differences remain and a breakthrough appears unlikely in the immediate future. Oil prices are also finding support from signs of tighter supply conditions in the United States. Preliminary industry data showed a decline of 4.9 million barrels in US crude inventories last week, suggesting that available supplies remain under pressure. For now, the market continues to reflect heightened concerns over supply disruptions, keeping prices near five-month highs.
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