Khaberni - Oil prices rose more than two percent on Tuesday, offsetting some of the losses from the previous session, amid concerns about supplies in the light of the near-complete closure of the Strait of Hormuz and the refusal of US allies to heed calls to send warships to help tankers navigate the vital waterway.
Brent crude futures climbed $2.74, or 2.7 percent, to $102.95 a barrel while West Texas Intermediate crude rose $2.45, or 2.6 percent, to $95.95.
In the previous session, Brent crude futures recorded a drop of 2.8 percent at settlement, while West Texas Intermediate crude fell 5.3 percent after some ships navigated the strait.
The Strait of Hormuz - through which 20 percent of the world's oil and liquefied natural gas trade passes - is severely disrupted due to the American-Israeli war on Iran, now in its third week, raising concerns about supply shortages and escalating energy costs and inflation.
Several US allies declined President Donald Trump’s call yesterday to send warships to accompany ships through the Strait of Hormuz, sparking his criticism accusing Western partners of ingratitude after decades of support.
At the same time, traders said that prices received additional support following a fire in the Fujairah petroleum industries area after a drone attack during the morning trading hours in Asia, although no injuries were reported.
Standard crude prices produced in the Middle East rose to all-time highs, becoming the world's most expensive oils, with traders attributing this to the reduced supplies available for delivery.
Two sources said that oil production in the UAE, the third largest producer in the Organization of the Petroleum Exporting Countries (OPEC), has declined by more than half due to the near-complete closure of the Strait of Hormuz, which forced the Abu Dhabi National Oil Company (ADNOC) to cut production on a large scale.
Three knowledgeable sources said that Iran asked India to release three oil tankers that were detained in February as part of talks aimed at ensuring the safe passage of ships flying the Indian flag or heading to it from the Gulf through the Strait of Hormuz.
To curb rising energy costs, the head of the International Energy Agency proposed that member countries withdraw more oil in addition to the 400 million barrels they had already agreed to draw from strategic reserves.
Israel said it has detailed plans to continue the war for at least three more weeks, during which the Israeli army launched attacks on locations across Iran overnight.
