Brent crude oil prices rose on Wednesday after falling for two consecutive sessions, as investors monitored Israel's election results, renewed diplomatic efforts in the Middle East and developments surrounding the conflict involving Iran.
Brent, the international benchmark, was trading 1.22% higher at $115.10 a barrel at the last check.
Markets are assessing whether the latest political developments in Israel and diplomatic engagements involving regional powers could alter the trajectory of the Middle East conflict and ease concerns over potential disruptions to global oil supplies.
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Israel Election Results In Focus As Netanyahu Faces Political Challenge
Investors are tracking Israel's election results amid indications of shifting political support for Prime Minister Benjamin Netanyahu.
Exit polls indicated that opposition leader Gadi Eisenkot held a narrow lead over Netanyahu, although neither bloc had secured a majority and vote counting was still underway.
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Netanyahu, a dominant figure in Israeli politics for decades, has led the country through nearly three years of continuous conflict. The election outcome could influence Israel's political direction and the broader regional outlook.
For oil markets, investors are watching whether the political developments affect the prospects for de-escalation or add to uncertainty across the Middle East, a critical region for global energy supplies.
Middle East Peace Talks In Focus; Iran Calls For End To 'Neither War Nor Peace'
Crude oil prices are also reacting to renewed diplomatic efforts aimed at easing tensions in the region.
Officials from Saudi Arabia, Pakistan and Turkey held discussions with Iranian leaders on Monday as regional powers explored ways to de-escalate the conflict.
Iran's Supreme Leader Mojtaba Khamenei also called for an end to the current state of “neither war nor peace”, according to a post on his social media account.
Khamenei discussed safeguarding national and regional security while maintaining control over the Strait of Hormuz, a strategically important shipping route for global oil supplies.
The diplomatic developments have drawn attention from energy markets, with investors assessing whether negotiations could reduce the risk of supply disruptions.
Saudi Arabia has also faced repeated attacks from Iran-allied Houthi militants in recent weeks. The strikes have targeted energy infrastructure and civilian facilities, including airports, raising concerns over the security of regional oil exports.
US Crude Oil Inventories Fall By 2 Million Barrels
Developments in the Middle East were accompanied by signs of tighter oil supplies in the US.
US crude oil inventories fell by 2 million barrels in the week ended October 23, indicating a decline in domestic stockpiles.
A further reduction in inventories could support crude prices by signalling tighter supply conditions, although the broader price outlook will also depend on demand, production and geopolitical developments.
Brent Crude Oil Prices Fell For Two Sessions
Brent crude prices declined for two consecutive sessions before rebounding on Wednesday, as renewed diplomatic efforts raised hopes of easing tensions in the Middle East. On Tuesday, Brent crude futures fell 1.7% to settle at $113.88 a barrel. US West Texas Intermediate (WTI) crude futures declined 1.8% to close at $99.90 a barrel.
The latest rebound suggests that geopolitical uncertainty and supply concerns remain important drivers for the oil market, even as investors monitor diplomatic efforts to contain the conflict.
Going forward, crude oil prices are likely to remain sensitive to developments in Israel, Iran's diplomatic engagement with regional powers, the security of the Strait of Hormuz and fresh data on global oil inventories.
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