05/03/2026 04:40 AST
Oil prices rose about 1 percent on Wednesday ?as US-Israeli strikes on Iran disrupted Middle East supplies, but the pace of gains slowed from past sessions after President Donald Trump suggested the US Navy could escort vessels through the Strait of Hormuz.
Brent rose 91 cents, or 1.1 percent, to $82.31 a barrel by 1:15 p.m. Saudi time, after closing on Tuesday at its highest since January 2025.
US West Texas Intermediate crude rose 63 cents, or 0.8 percent, to $75.19, after settling at its highest ?since June.
"The primary ?near-term driver for oil prices remains the US-Iran ?conflict," ?said ?OANDA ?senior market ?analyst Kelvin Wong, adding: "At this stage, only clear signs of de-escalation could mitigate or reverse the current bullish trend for WTI, and such signals are currently lacking."
Israeli and US forces struck targets across Iran on Tuesday, prompting Iranian strikes against energy infrastructure in a region that accounts for just under a third of global oil production.
Iraq, the second-largest crude producer in the ?Organization of the Petroleum Exporting Countries, has cut output ?by nearly 1.5 million barrels a day, ?about half its production, due to storage limits ?and the lack of an ?export route, officials told Reuters.
They said the country may have to ?shut nearly 3 million bpd of output within days if exports do not resume.
Iran has also targeted tankers in the Strait of Hormuz, through which about a fifth of the world's oil and liquefied natural gas flow. Traffic through the ?Strait remains effectively closed.
Trump said the US Navy could begin escorting oil tankers through the Strait if necessary, ?adding that he ?had ordered the US International Development Finance Corporation to provide political risk insurance and financial guarantees for maritime trade in the Gulf.
"While oil prices declined on the headline, we think the insurance proposal is likely in a concepts-of-a-plan stage and question whether there has been sufficient coordination with the multiple international tanker insurers," RBC analyst Helima Croft said.
Countries and companies have begun seeking alternative routes and supplies. India and Indonesia said they were looking for other energy supplies, while some Chinese refineries were shutting or moving up maintenance plans.
In the US, crude stocks rose ?by 5.6 million barrels last week, ?according to market sources citing American Petroleum Institute figures, well above the 2.3 million projected by analysts.
Official figures from the US government are expected later on Wednesday.
Reuters
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