Oil Prices Climb Over 1% To Reach $97 Per Barrel As Middle East Tensions Raise Supply Concerns

Oil prices extended gains on Wednesday, June 3, amid weakening hopes of a peace agreement after heightened hostility between the United States and Iran stoked fears of supply disruptions.

Brent crude futures rose toward $97 per barrel, while WTI crude traded near $95 per barrel after advancing more than 7 per cent during the first two trading sessions of the week.

Market sentiment remained sensitive to developments in the Middle East.

According to Aljazeera, the United States military’s Central Command (CENTCOM) said its forces conducted “self-defence” strikes on Iran’s Qeshm Island and “defeated multiple” Iranian missiles and drones, as civilian vessels and regional allies Kuwait and Bahrain came under attack.

Iran’s Tasnim new agency cited the Islamic Revolutionary Guard Corps (IRGC) confirming it launched retaliatory missile and drone attacks on US bases in the region, but did not name Kuwait or Bahrain, following the Qeshm strikes.

However, the US President Donald Trump has indicated that peace talks may continue despite the heightened hostilities.

Israel also continued military strikes on Lebanon.

However, US President Donald Trump expressed confidence that Washington and Tehran could soon reach an interim agreement, dismissing reports from Iranian state media suggesting that negotiations had been suspended due to the conflict in Lebanon.

Uncertainty surrounding the extension of the current ceasefire and the possible resumption of oil shipments through the Strait of Hormuz has added to market volatility. Oil prices had weakened in May on expectations of a diplomatic breakthrough, but delays in negotiations have revived concerns over tighter global supplies and lower crude inventories.

The Trump administration is seeking written commitments from Iran on specific nuclear concessions as part of a preliminary agreement aimed at ending the conflict.

Tehran had earlier provided verbal assurances on certain aspects of its nuclear programme, the report said.