Brent crude rose 0.70% to $109.55 a barrel on Wednesday, October 21, as hopes for a diplomatic breakthrough between the United States and Iran remained uncertain and fresh concerns about oil supplies supported prices.
The benchmark has gained 10.38% over the past month and is 75.02% higher than a year ago, according to CFD data tracking Brent crude.
The latest rise follows Tuesday’s decline, when prices eased after Pakistan’s army chief, Field Marshal Asim Munir, met Iranian President Masoud Pezeshkian in Tehran to discuss mediation efforts. The meeting raised hopes of progress, but Iran’s position suggests that a deal remains some distance away.
Iran has told Munir it will not resume negotiations with Washington until its demands are met, including lifting sanctions on Iranian oil exports and ending the US blockade of Iranian ports. That leaves traders weighing the possibility of renewed talks against the risk that the conflict could continue.
The uncertainty is playing out alongside continued threats to shipping and energy infrastructure. At least 18 vessels have come under attack over the past two weeks, according to maritime tracking firm Kpler, while analysts have warned that the risks extend beyond the Strait of Hormuz into the Gulf of Oman.
The conflict involving Iran-backed Houthi forces and Saudi Arabia is adding to those concerns. The Houthis have claimed attacks on Saudi energy facilities and airports, although some of their claims have not been independently verified.
For oil traders, the concern is not just whether crude can be produced, but whether it can reach buyers safely and without costly delays.
Falling US stocks add support
US crude inventories also fell by 4.9 million barrels in the week ending October 16, according to preliminary figures from the American Petroleum Institute. Stocks of refined products also declined, adding to concerns about available supplies as US officials work with international refiners to increase fuel production amid a diesel shortage.
Meanwhile, oil shipments from the Persian Gulf have recovered to around 80% of pre-war levels, according to US Energy Secretary Chris Wright. That recovery offers some relief, although refined-product deliveries remain more constrained.
The market is therefore facing two competing signals: more oil is moving out of the region, but the threat of further attacks remains, and US inventories are falling.
For now, the return towards $110 shows that traders are not yet convinced diplomatic efforts will quickly resolve the supply risks. A credible agreement could ease pressure on prices, but without one, developments around the negotiations and shipping routes are likely to remain key drivers of the market.
