Oil prices increased by more than 1% on Wednesday 3 June, continuing a rise seen in the previous session, as renewed hostilities in the Middle East and stalled negotiations between Iran and the US added uncertainty to the market.
At 06:40 GMT, Brent crude futures were up $1.56, or 1.6%, at $97.56 per barrel (bbl), reported Reuters.
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Meanwhile, US West Texas Intermediate (WTI) crude had increased by $1.61, or 1.7%, to $95.37/bbl.
Both benchmarks closed at their highest levels in a week during the prior session.
The gains followed reports from the US military that Iran had fired ballistic missiles towards Kuwait and Bahrain but had not hit any targets.
In response, the US military claims to have carried out strikes on Iran’s Qeshm Island.
On the supply front, US crude oil inventories dropped for a seventh consecutive week, according to American Petroleum Institute figures cited by market sources.
Stocks fell by 6.8 million barrels in the week ending 29 May.
Diplomatic efforts to resolve the conflict showed little progress, with Iranian media indicating that Tehran was reviewing a proposed agreement with Washington to halt the fighting.
However, reports suggested that Iran had not communicated with the US for several days.
The stalemate comes more than three months after the US and Israel began strikes against Iran, leaving a fragile ceasefire in place.
Tensions in the region have heightened concerns about global oil supply at a time when inventories are declining.
Meanwhile, Russia increased crude exports from its western ports by 15% in May compared to April, based on information from two industry sources, reported Reuters.
This rise, to 2.5 million barrels per day (mbbl/d), followed Ukrainian drone attacks that disrupted Russian refineries, compelling Moscow to redirect more crude for export.
Ukrainian attacks on Russian refining and export facilities have caused domestic fuel shortages and reduced Russian oil output, according to the International Energy Agency (IEA).
Elsewhere, the IEA warned that global oil inventories could reach critical lows if current stock draw rates persist as peak summer demand approaches, reported Reuters.
Chinese crude imports in May were 6mbbl/d lower than in March, which had previously balanced markets and contributed to weaker prices despite restricted shipping through the Strait of Hormuz.
According to the IEA, Gulf oil producers have lost around 14mbbl/d of supply since late February, while output from the US, Argentina, Brazil and Venezuela has increased.
