Oil prices climb as attacks dampen hopes for reopening Strait of Hormuz

World oil prices surged after attacks on vessels in the Middle East raised doubts about a breakthrough in negotiations to reopen the Strait of Hormuz, one of the world's most critical maritime routes.

Brent crude climbed more than 2% in overnight trading into Wednesday, bringing the international benchmark close to $90 a barrel. October Brent futures stood at $89.61 a barrel at 03:00 GMT, up about 24% from before the U.S. and Israel launched their military campaign against Iran in late February.

Tim Waterer, chief market analyst at Sydney-based KCM Trade, told Al Jazeera that the market has not fully lost hope for a deal, but confidence is clearly waning. He stressed that prolonged talks without tangible progress, along with increasingly complex demands, are fueling investor skepticism about reaching a viable agreement in the short term.

“The optimism from early in the month is gradually giving way to caution, with a bias toward pricing in risk,” Waterer said.

In related developments, Yemen's internationally recognized government on Tuesday accused Iran-aligned Houthi forces of killing six people in missile attacks on a commercial vessel in the Bab al-Mandeb Strait, the waterway separating the Arabian Peninsula from the Horn of Africa. Yemen's coast guard said the victims included two security personnel deployed in a rescue operation after the initial attack.

The U.S. Central Command (CENTCOM) said the same day that it struck and disabled a Panamanian-flagged cargo ship after the vessel attempted to break the U.S. blockade of Iranian ports.

Oil prices have trended higher over the past week amid mixed signals about the prospects of a deal to reopen the Strait of Hormuz, which before the war carried about one-fifth of global oil supply.

Qatar's foreign ministry said on Tuesday that talks between Oman and Iran on the strait are at an advanced stage and expressed hope the waterway would soon be reopened. Tehran, meanwhile, insisted its negotiations with Oman are separate from the issue of reopening the strait, stressing it would remain closed until the U.S. meets certain conditions, including war reparations and lifting sanctions.

For his part, U.S. President Donald Trump said on Tuesday that Washington has full control of the strait, despite traffic through it remaining a fraction of pre-war levels. According to maritime intelligence firm Windward, only 10 vessels transited the critical waterway on Monday, compared with roughly 130 per day before the war.

In its latest market outlook released Tuesday, the U.S. Energy Information Administration (EIA) projected that Middle East oil production would not return to near pre-conflict levels until early 2027, and forecast Brent averaging $87 a barrel in 2026.

June Goh, senior oil analyst at Singapore-based Sparta Commodities, said OPEC's output can only rise once flows through the Strait of Hormuz normalize in both directions. As a result, oil prices remain fundamentally supported at $85–90 a barrel, unless there are positive developments from diplomatic talks that have yet to yield significant progress.