Brent crude rose above $100 a barrel once more on Wednesday, pulling back from declines earlier in the day amid uncertainty over US-Iran talks and prolonged tension in the Strait of Hormuz.
Brent, the benchmark for two thirds of the world's oil, was up 4.14 per cent at $101.80 per barrel at 8.31pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 3.64 per cent to $93.38 a barrel.
Oil prices have swung wildly in recent days, dropping on Friday after the US and Iran declared the Strait of Hormuz open. However, Tehran on Saturday said the waterway was closed again, and accused Washington of breaching certain aspects of the ceasefire.
Crude remained elevated and hovered around the $100 mark on Tuesday, when US President Donald Trump insisted he would not extend the truce with Iran. He eventually agreed to do so before the ceasefire expired on Wednesday, after a request from Pakistan, which was acting as mediator for the two sides.
The future of the oil market remains uncertain even after the strait, through which a fifth of the world's oil passes, reopens, said Ole Hansen, head of commodities strategy at Saxo Bank.
“The key question now is what happens next, assuming a more durable reopening can eventually be achieved. Even in a scenario where the strait remains open, the process of restoring normal flows is unlikely to be smooth,” he said.
“Tankers are out of position, supply chains dislocated, and the task of realigning vessels with loading and discharge points may create a logistical bottleneck in the weeks ahead. A reopening in principle does not translate into an immediate recovery in effective supply.”
The crisis in the Strait of Hormuz has had significant ripple effects regionally, as energy-producing countries have been unable to export their products, and across the globe, with net energy importers the most affected.
