Supply Concerns Push Brent to 3-Week High
Oil prices rose during Wednesday's trading (Aug 19), hitting a three-week high. Brent crude climbed approximately 0.59% to US$91.56 per barrel, while WTI gained 0.69% to US$85.53. Brent reached its highest level since July 30, and WTI hit its highest point since July 31.
The rally was driven by ongoing uncertainty regarding shipping activity through the Strait of Hormuz. US President Donald Trump stated that the waterway remained open and that no talks were currently underway with Iran. However, Tehran issued a conflicting statement, insisting that the Strait of Hormuz remained closed.
Tensions escalated after a temporary ceasefire agreement expired on Monday. A senior Iranian official stated that the country was shifting toward a "fully offensive" military posture due to the diplomatic stalemate, although there were no reports of new attacks from either side on Tuesday.
The Strait of Hormuz remains a focal point for the market, as the route handled roughly one-fifth of global oil and LNG supplies prior to the conflict. Recent shipping data indicates a slowdown in vessel activity as many shipowners opt to avoid the region, keeping the risk of supply disruptions high.
Meanwhile, Iraq has begun preparing alternative export mechanisms involving international and local companies, as well as multiple shipping routes. This scheme is set to run for three months, starting September 1. Concurrently, Russian supplies are under pressure; shipments via western ports fell to approximately 2.3 million barrels per day during the first half of August—about 15% below initial plans—due to disruptions at the Port of Novorossiysk.
Newsmaker Analysis: Brent’s rise above US$91 suggests the market is beginning to price in a larger geopolitical risk premium. As long as uncertainty surrounding Hormuz and Russian supply disruptions persist, the bias for oil prices remains bullish. If Brent can sustain levels above US$91–US$92, a move toward US$95 becomes increasingly likely; triple-digit prices could even come back into focus should the conflict worsen. However, the normalization of shipping in the Strait of Hormuz or an increase in alternative exports could potentially trigger profit-taking following the rally seen over the last few sessions. (arl)
Source: Newsmaker.id
