Crude continues rally: Brent tops $92, WTI above $85 as Strait of Hormuz tensions threaten global supplies

Crude oil prices extended their rally on Wednesday, with Brent crude holding above the $90-a-barrel mark as escalating tensions in the Middle East kept investors focused on the risk of further disruptions to global energy supplies.Brent crude was trading at $92.40 a barrel, up 1.53% or $1.39, while US West Texas Intermediate (WTI) crude gained 1.38% or $1.16 to $85.50 a barrel.The gains came after both benchmarks ended Tuesday at their highest closing levels in around five weeks. Brent settled at $91.01 a barrel and WTI at $84.91, each rising about 2% during the session as geopolitical developments added to supply concerns.The momentum comes as the Middle East crisis involving the United States, Iran and the Iran-backed Houthis has intensified. Earlier this week, the Houthis announced a naval blockade on Saudi Arabia, expanding concerns over disruptions to energy supplies and trade routes.Shipping activity has already been affected. Two tankers carrying Saudi crude destined for China and India changed course in the Red Sea after the Houthi threats and headed back towards the Suez Canal, according to LSEG shipping data cited by Reuters. Despite this, Saudi Arabia’s Red Sea export terminal at Yanbu was reported to be operating normally.Military action also continued overnight. US forces struck targets in southern and western Iran, while Iran targeted US sites in Bahrain, Kuwait and Jordan. At least one tanker was also hit in the Strait of Hormuz, a key global energy shipping route.Beyond the Middle East, another supply risk emerged after the Caspian Pipeline Consortium suspended receiving oil from Kazakhstan following attacks on oil tankers at its Black Sea terminal. Russia blamed Ukraine for the attacks, while Ukraine did not comment.Separately, data from the Joint Organizations Data Initiative showed Saudi Arabia’s crude exports fell for the third consecutive month in May, reaching a record low.Markets are now looking ahead to US inventory data for fresh direction. Analysts expect crude stockpiles to have fallen by 0.5 million barrels in the week ended July 17. If confirmed, it would mark a second straight weekly decline. The comparable week last year recorded a draw of 3.2 million barrels, while the average decline over the past five years was 1.2 million barrels.The impact of the conflict is also being felt beyond energy markets. A United Nations report released on Tuesday projected that more than 500 million people could still face chronic hunger by 2030 despite recent improvements, with Africa expected to account for the largest share.International Fund for Agricultural Development (IFAD) President Alvaro Lario warned that prolonged disruptions to shipping and energy supplies could worsen food insecurity. According to AP, the expert had also warned that if uncertaility continues, including around the Strait of Hormuz, could leave an additional 9 million to 18 million people facing hunger.Meanwhile, the Middle East has continued to boil with US and Iran once again launching strikes. The crisis that began on February 28 had already pushed crude higher to $126 per barrel from the $70 per barrel price, though prices cooled after both sides signed the now breached interim peace deal.