Oil prices rose by more than 5 percent as renewed geopolitical tensions between the United States and Iran raised concerns about supply stability while shipping through the Strait of Hormuz remained disrupted.
Brent crude increased by about 4.81 dollars or 5.3 percent to reach 95.19 dollars per barrel while US West Texas Intermediate rose by 4.96 dollars or 5.9 percent to 88.81 dollars per barrel.
Prices had recorded a sharp decline in the previous session following signals of potential improvement in shipping flows but recent developments brought uncertainty back to markets especially with growing caution among shipping companies.
Estimates indicate that around 10 to 11 million barrels per day of supply remain out of the market putting pressure on supply demand balance and supporting prices.
Meanwhile markets are closely watching the direction of relations between Washington and Tehran amid mixed signals regarding the continuity of temporary understandings which directly impacts expectations for global oil flows.
The Strait of Hormuz is a key energy route through which about one fifth of global supply used to pass before tensions escalated making any disruption a major factor influencing market direction.
Analysts see current price movements as a reflection of market sensitivity to geopolitical developments alongside ongoing challenges facing the return of supply to normal levels.
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