Oil prices climb again as Middle East supply risks persist

Global oil prices rose for a second consecutive session on Tuesday (September 29) as the prolonged US-Iran conflict raised fresh concerns over disruptions to crude supplies from the Middle East.

Brent crude futures climbed $1.49, or 1.4 per cent, to $106.77 a barrel, while US West Texas Intermediate (WTI) crude gained $1.34, or 1.5 per cent, to $93.94. Both benchmarks had risen by about $1 in the previous session.

Despite a recovery in regional exports, traders remain concerned about the cost and reliability of alternative shipping routes. KCM Trade chief market analyst Tim Waterer said increased exports from the Gulf were being facilitated partly through costly and slower ship-to-ship transfers, keeping upward pressure on prices.

Data from commodities intelligence firm Kpler showed crude exports from major Middle Eastern producers rose to 12.8 million barrels per day in September, their highest level since February, driven mainly by higher shipments from Saudi Arabia and the United Arab Emirates. However, the figure remains about 6 million bpd below February levels of 18.8 million bpd.

Meanwhile, Washington and Tehran have renewed diplomatic efforts to end the seven-month conflict, with officials from both sides holding indirect discussions through mediators. Talks could focus on a revised version of a seven-day ceasefire proposal put forward by Iran last week on the sidelines of the UN General Assembly.

Analysts at UOB, however, said uncertainty remained high, warning that the prolonged US-Iran confrontation and the situation around the Strait of Hormuz could continue to fuel inflation and threaten global oil supplies.