Oil Recovers After Previous Session’s Decline

Oil prices rose approximately 1% on Wednesday after falling to two-month lows in the previous session. Brent crude futures gained $1.22, or 1.3%, to $92.71 a barrel, while US West Texas Intermediate crude advanced $1.09, or 1.3%, to $87.13 as of 1412 GMT.

The recovery followed comments from Iran’s security chief that Tehran would not permit enriched nuclear material to leave the country. Washington has said nuclear issues must be included in any initial negotiations aimed at ending the US-Israeli war against Iran.

Prices had initially fallen by more than $3 a barrel on Tuesday after US officials played down the likelihood of further military strikes. However, the decline was partly reversed after an Iranian security official said no negotiations were underway between the two sides.

The latest comments have weakened expectations of an imminent de-escalation, providing support for crude prices. Despite Wednesday’s recovery, Brent and WTI remain down approximately 21% and 17%, respectively, since the beginning of November, reflecting earlier hopes for an end to the conflict.

Strait of Hormuz Shipping Risks Persist

Concerns over tanker security remain a central factor for the oil market. Thirty-seven ships were attacked in October, the highest monthly total since the war began, according to the figures cited in the report.

A tanker was struck northeast of Lima in Oman, while Iran’s Revolutionary Guards Navy separately reported that two tankers caught fire after hitting naval mines on what it described as an unauthorized route through the Strait of Hormuz.

The increase in vessel attacks has added uncertainty to diplomatic efforts and raised questions about the reliability of energy shipments through the Gulf.

Even if an agreement is reached, higher shipping volumes may not return immediately. Mine clearance, insurance costs and shipowners’ willingness to accept the risks could continue to constrain traffic through the waterway.

US Inventories and Middle Eastern Supply

On the supply side, US crude inventories reportedly increased by 9 million barrels during the latest week, based on American Petroleum Institute data cited by market sources. Official inventory figures were expected later on Wednesday.

Meanwhile, disruptions to Middle Eastern crude and condensate supplies have declined to approximately 3.8 million barrels per day. Saudi and Iraqi crude production has returned to pre-war levels, with outages in both countries falling significantly.

These developments indicate some improvement in regional supply conditions, although shipping security remains a separate concern for the market.

Russian Infrastructure Adds to Supply Uncertainty

Separately, a drone attack caused a fire in the port area of Ust-Luga on Russia’s Baltic coast, injuring three workers, according to a regional governor.

Russian oil refining capacity has also been reduced by approximately 30% since late October following renewed Ukrainian drone attacks.

Russia’s chief negotiator on Ukraine said a peace settlement appeared closer after two days of talks in Abu Dhabi, adding another geopolitical development to the broader energy outlook.

What Investors Should Watch Next

Oil markets remain sensitive to developments in US-Iran diplomacy and the security of shipping through the Strait of Hormuz. Any progress toward an agreement could improve expectations for supply flows, but mine clearance, insurance costs and vessel security may delay a full recovery in shipments.

Investors will also monitor official US inventory data and the extent to which Middle Eastern production normalizes. The combination of diplomatic uncertainty, shipping disruptions and Russian energy infrastructure risks is likely to remain important for near-term crude price movements.