Oil hits six-week high as war threatens crude shipping routes

Oil prices rose to their highest levels in six weeks on Wednesday, with Brent crude nearing 99 dollars a barrel, as concerns over supply increased amid the escalating US-Iran war and growing Houthi threats against shipping in the Strait of Hormuz.

Oil prices settled at their highest level since 11 June, driven by fears of supply disruptions caused by the intensifying conflict between the United States and Iran and Houthi threats to target commercial vessels.

Brent crude futures rose by 3.06 dollars, or 3.36 per cent, to settle at 94.07 dollars a barrel, their highest closing level in about six weeks, after reaching an intraday high of 95.47 dollars.

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US West Texas Intermediate crude gained 2.49 dollars, or 2.95 per cent, to settle at 86.83 dollars a barrel.

The Brent futures spread between the front-month contract and the contract due in three months widened to 9.26 dollars a barrel, its highest level since 22 May. The move reflects a stronger backwardation market, in which prompt contracts trade at a premium to later-dated contracts, typically signalling tighter short-term supplies.

Meanwhile, the US military said it had carried out strikes on Iran for the eleventh consecutive night.

The US attacks came shortly after the Kuwaiti military said its air defences had intercepted Iranian drones.

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