Oil prices climb as Hormuz reopening hopes fade amid fresh attacks

Supply fears resurface

Oil prices climbed on Wednesday as fresh attacks in the Gulf region eroded hopes that the Strait of Hormuz might soon reopen. The waterway, through which roughly a fifth of global oil passes, has been at the centre of heightened tensions between the US and Iran.

Brent crude hovered near $90 a barrel, while US oil rose above $83, according to market data. The gains came as traders weighed the latest developments against a backdrop of fragile supply chains and geopolitical uncertainty.

Hormuz reopening conditional

Iranian officials have made clear that the strait will not reopen until certain conditions are met. The statement, reported by CNBC, poured cold water on earlier speculation that a resumption of normal traffic was imminent.

Diplomatic efforts between Washington and Tehran have shown little visible progress, with new demands from the US side further complicating negotiations. The Guardian noted that oil prices were hovering near $90 a barrel as these demands were made public.

Gold hits two-month high

As oil climbed, gold also gained, reaching a two-month high. Investors have been turning to safe-haven assets amid the uncertainty, a classic response when geopolitical risk escalates and inflationary pressures remain sticky.

The simultaneous rise in oil and gold points to a market bracing for prolonged disruption. Equity markets, by contrast, have been more jittery, with energy stocks seeing mixed trading as investors assess the impact on global growth.

Volatility expected to persist

The Wall Street Journal reported that volatility is likely to remain elevated as Middle East developments continue to unfold. Traders are pricing in a range of scenarios, from a swift diplomatic breakthrough to a prolonged closure of the strait.

Analysts have cautioned that the situation remains fluid. The attacks that have dented hopes for reopening have not been attributed to any specific group, and officials have not yet confirmed the full extent of the damage.

What to watch

All eyes will now turn to any official statements from Washington or Tehran regarding the next steps in negotiations. A clear signal on the conditions Iran has set could determine whether oil prices retreat or push further upward.

For now, the market remains on edge, with traders likely to react sharply to any news from the Gulf. The coming days will be critical in shaping the near-term trajectory for crude and global risk sentiment.