Oil Rebounds From 2-Month Low as US-Iran Diplomacy Doubts Meet Hormuz Shipping Risk

Benzinga · 2d ago

Oil prices rose on Wednesday, recovering from two-month lows as investors balanced Iran peace hopes against concerns over tanker attacks near the Strait of Hormuz.

Brent crude futures gained 0.6% to $92.01 a barrel at the time of writing. US West Texas Intermediate (WTI) added 0.2% to $86.20.

Pump Prices Ease, but Diesel Stays Near Record

According to American Automobile Association (AAA) data, the national average for regular gasoline stood at $3.9429 a gallon, about 21% below its all-time high of $5.0165 set on June 14, 2022. That is still up roughly 28% from $3.0719 a year ago.

Diesel is much closer to its peak. It averaged $6.1306 a gallon, about 6% below the record $6.5276 set on Sept. 22.

The price movement followed President Donald Trump’s Monday remarks after meeting Qatar’s prime minister. Trump said talks showed "positive momentum" and further US strikes were "quite unlikely," though forces stay ready. Iran’s security council secretary, Mohsen Rezaei, dismissed the talks as "fake news." On Tuesday, Rezaei told Al-Mayadeen that Tehran is not negotiating and awaits a "clear and explicit" US response to seven conditions.

LSEG Oil Research, cited by Reuters, said that even with a deal, higher Hormuz flows would hinge on mine clearance, insurance costs and shipowners’ appetite for risk.

Meanwhile, Regional governor Aleksandr Drozdenko said on Telegram on Wednesday that a drone attack sparked a fire in the port area of Ust-Luga, on the Baltic Sea in northwest Russia, injuring three workers, Reuters reported.

Analyst Says Oil May Be Oversold

Obsidian Risk Advisors Managing Principal Brett Erickson said in an X post that oil looks "significantly oversold and underpriced" near $92 a barrel. He said a fear premium pushed prices as high as $118 before the midterms, and warned markets are wrongly pricing in an end to the war.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock