Oil rises as Middle East tensions keep supply disruption fears alive

Global oil prices rose for a second consecutive session on Tuesday as uncertainty surrounding the Middle East conflict continued to raise concerns about supplies. Brent crude futures were up $1.49, or 1.4 per cent, at $106.77 a barrel by 0326 GMT, while US West Texas Intermediate gained $1.34, or 1.5 per cent, to $93.94, Reuters reported. Both benchmarks had ended the previous session nearly $1 higher.

The increase reflected concern that stalled negotiations involving the United States, Israel and Iran could prolong disruptions to crude exports and regional shipping routes. Prices have been trading at roughly $104 to $108 a barrel amid geopolitical uncertainty. Tim Waterer, chief market analyst at KCM Trade, said higher export volumes from the Gulf had not yet restored normal supply efficiency.

He said producers were relying on workarounds such as ship-to-ship transfers, which were more expensive and less efficient. Data provider Kpler estimated that crude exports from major Middle Eastern producers reached 12.8 million barrels per day in September, the highest level since February. The increase was supported by shipments from Saudi Arabia and the United Arab Emirates.

US and Iranian officials have held separate discussions with mediators in efforts to end the seven-month conflict. Further talks are expected to consider an amended version of a seven-day proposal presented by Iran. The price rise is creating additional pressure for Nigeria and other African economies.

The report said higher crude and refined-product prices were feeding into energy, transport and inflation costs. Petrol prices in parts of Nigeria had risen to nearly N1,500 a litre from between N1,200 and N1,300 after an earlier ceasefire agreement, while businesses and households faced further cost-of-living pressure.