Global Oil Prices Rise

Oil prices in the international market have risen, driven by the prospect of diplomatic talks aimed at easing tensions in the Middle East. However, reports of fresh attacks by the Iran-backed Houthi group on Saudi Arabia have heightened concerns regarding regional energy supplies.

After falling by nearly 1 percent earlier in the day on Tuesday (October 27), oil prices rebounded. By 1:18 PM Bangladesh time, the price of Brent crude had risen by 40 cents—or 0.4 percent—to $116.24 per barrel. Simultaneously, the price of the U.S. benchmark, West Texas Intermediate (WTI), increased by 30 cents—or 0.3 percent—to reach $102.07 per barrel.

Both types of oil had seen a decline of approximately 1 percent earlier on Monday. On the same day, representatives from Saudi Arabia, Turkey, and Pakistan met with Iranian officials in Tehran to discuss ways to reduce tensions in the Middle East.

According to Iranian state media, the four nations agreed to continue discussions aimed at strengthening cooperation to bolster peace and security.

Sugandha Sachdeva, founder of the New Delhi-based research firm SS WealthStreet, noted that oil prices remain elevated due to persistent geopolitical uncertainty. She added that earlier in the day, some investors opted to book profits—anticipating potential progress in talks between the U.S. and Iran—which exerted downward pressure on prices.

Nevertheless, the prospects for peace in the Middle East remain fragile. The Iran-backed Houthi group has claimed responsibility for new attacks targeting critical oil infrastructure in Saudi Arabia, raising fears of potential disruptions to energy supplies.

Last week, following a series of attacks by Iran on oil tankers near the Strait of Hormuz, the price of Brent crude climbed above $117 per barrel—its highest level since April. Prices also reached $117 on Monday.

According to data from a Washington-based research organization, there has been an increase in attacks on commercial vessels in and around the Strait of Hormuz throughout the month of October. Among the maritime security incidents monitored by the organization since 2017, the situation regarding attacks in this region has reached its worst point this October.

The conflict spreading across the Middle East has brought the strategic importance of the Strait of Hormuz back into focus. Before the conflict began in February, approximately one-fifth of the world's total energy supply was transported through this narrow waterway.

An analysis by ANZ Research indicates that the oil market is currently at risk, as pressure mounts across supply, transportation, storage, and refining sectors.

According to the report, crude oil exports from the Gulf region have declined for the fourth consecutive week. The flow of oil through the Strait of Hormuz has dropped to about 60 percent of its normal volume. Meanwhile, global inventories of refined petroleum products are approximately 5 percent below the five-year average.

While diplomatic discussions have provided some relief to the oil market, the ongoing conflict in the Middle East and the risk of attacks on critical energy infrastructure continue to fuel uncertainty in the global market.

Source: Reuters