On Wednesday, the price of Brent oil (Brent) increased by nearly 3% to $93.90 per barrel. This increase was recorded at 11:18 AM Eastern Time (ET) and represents a doubling of the 1.4% increase at 9:27 AM, while West Texas Intermediate (WTI) crude also rose to $87.98 with an increase of nearly 2%.
Oil Market Situation and Reasons for Price Increase
This price increase occurred as Saudi Arabia reported that oil production in October approached pre-war levels. Since the beginning of November, Brent prices had decreased by about 21% and WTI by about 17%, which was attributed to expectations of reduced tensions in the region. However, statements from Iranian officials regarding not negotiating with Washington changed the market situation.
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Iran's Reactions and Analyses
Mohsen Rezai, a senior security official in Iran, denied any negotiations with Washington, calling reports of a recent meeting in Qatar "sheer lies" and described it as an attempt to lower oil prices. Additionally, Iran's President, Masoud Pezeshkian, accused the U.S. of using threats in diplomacy. Meanwhile, U.S. Secretary of State Marco Rubio rejected Iran's request for war reparations.
Analysts like Giovanni Stuanovo from UBS pointed to diminishing hopes for a reduction in tensions in the near future. Javier Blas, a Bloomberg writer, described the Brent price around $90 as "unusual," stating that this price is very low in the event of escalating tensions and very high in the case of an agreement.
Maritime movements in the Strait of Hormuz are also affected by recent attacks on 37 ships in October, the highest number recorded since the start of the war. Reports indicate that physical damages in Gulf countries exceed $200 billion, with cumulative economic damages expected to reach $790 billion by 2030.
Meanwhile, the rise in oil prices comes as retail gasoline prices in the U.S. fell by 3.6 cents to $3.94 per gallon on Wednesday, marking the largest daily decrease in 18 years.
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