Oil prices rebounded on Wednesday, recovering from a two-month low as fresh attacks on tankers near the Strait of Hormuz complicated hopes of easing tensions between the US and Iran.
Brent crude climbed 1.1% to $92.53 a barrel by 04:20 GMT, while US West Texas Intermediate gained 0.8% to $86.71.
The recovery followed a sharp decline driven by expectations that Washington could avoid further military action against Tehran.
However, with 37 vessels attacked in October and fresh incidents reported this month, traders remain uncertain whether diplomatic progress can restore normal Middle Eastern oil shipments.
Why Iran peace hopes are failing to calm oil markets
President Donald Trump's suggestion that further strikes against Iran may be unnecessary helped push Brent below $90 on Tuesday.
However, the diplomatic optimism has not produced a lasting agreement, while continued attacks on commercial vessels have raised doubts about shipping security.
According to the Washington Institute for Near East Policy, 37 vessels were attacked around the Strait of Hormuz and neighbouring waterways during October, the highest monthly total since the conflict began.
UK Maritime Trade Operations reported another tanker strike near Oman on Tuesday. Iran's Revolutionary Guards Navy separately claimed that two vessels caught fire after encountering naval mines, although those claims remain independently unverified.
June Goh, senior analyst at Sparta Commodities, suggested that increasing Middle Eastern crude shipments were creating downward pressure on prices, even as continued attacks complicated the diplomatic outlook.
The conflicting developments explain why oil remains vulnerable to sudden reversals despite improving expectations of a settlement.
Why an Iran peace agreement may not end the supply crisis
Even a successful agreement between Washington and Tehran would not necessarily restore normal shipping through the Strait of Hormuz immediately.
Tanker operators would still need assurances about maritime security, affordable insurance and the removal of potential navigational hazards.
Edward Bell of MUFG Research warned in a 10 November assessment that a sustained decline in oil prices would depend on a credible agreement capable of lasting beyond an initial ceasefire.
He highlighted an earlier arrangement that briefly reopened the strait during June and July before renewed attacks disrupted traffic.
Takahiro Asaoka of Itochu Research Institute similarly argued in comments published by Bloomberg that reduced prospects of prolonged US military operations were removing some of oil's geopolitical premium.
However, he expects Brent to remain above $85 without an agreement.
That distinction leaves traders balancing improving diplomatic prospects against the possibility of continued shipping disruptions.
US inventories rise, but oil supply risks remain
The latest US inventory figures offer a counterargument to the renewed increase in crude prices.
Preliminary American Petroleum Institute data indicated that US crude inventories rose approximately 9 million barrels in the week ended 6 November, suggesting improving near-term availability.
However, the US Energy Information Administration expects Brent spot prices to average around $100 a barrel during November and December, assuming Middle Eastern supply constraints persist.
The agency estimates that regional production shut-ins averaged 2.5 million barrels per day in October, down from a peak of 10.9 million in May.
Looking further ahead, the EIA expects recovering production and rebuilding inventories to bring Brent towards $77 in the fourth quarter of 2027.
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