Oil prices climbed toward $90 a barrel on Tuesday as fading hopes for a US-Iran agreement revived fears of a broader Middle East escalation, while attacks on Libyan oil facilities and declining US strategic reserves added to concerns over global supply security.
International benchmark Brent crude futures for October traded at $90 per barrel at 11.24 a.m. local time (0824 GMT), up 2.6% from the previous close of $87.72.
US benchmark West Texas Intermediate (WTI) futures for September traded at $84.36 per barrel, up 2.7% from $82.13 in the previous session.
US President Donald Trump on Monday declined to detail the next steps in negotiations with Iran, while signaling that Washington could pursue a major military escalation if talks fail.
Speaking to reporters at the White House, Trump said, "You'll find out," when asked what would follow the latest round of talks, which he had previously described as Iran's "last chance" before possible military action.
Asked whether a "massive escalation" remained an option, Trump said the US had the capability to take such action if necessary.
Trump also said Iran should compensate Washington for damage he said Tehran had caused over the past 50 years.
The remarks renewed concerns over a potential escalation between Washington and Tehran, adding to uncertainty over Middle East oil supplies and supporting crude prices.
- Attacks on Libya oil facilities add to supply concerns
Repeated drone attacks on oil facilities in Libya increased concerns over potential disruptions to the country's output and exports.
A drone targeted an oil facility in the western city of Zawiya early Tuesday, marking the third such incident since Sunday, after an attack on a gasoline storage tank at the Zawiya oil depot a day earlier sparked a major fire and prompted the NOC to declare a state of “maximum emergency,” according to the National Oil Corporation.
The drone fell near the main oil tank and pipeline network at a plant operated by the Zawiya Oil Refining Company, with no casualties or material damage reported.
The NOC warned that continued attacks could force it to declare force majeure and halt operations at the Zawiya refinery.
Libya's crude oil production averaged approximately 1.35 million barrels per day in July, according to NOC data.
- US strategic oil reserves fall to lowest since 1983
A sharp decline in US strategic crude reserves also heightened concerns over the country’s emergency supply buffer.
US Strategic Petroleum Reserve (SPR) inventories fell by 6.1 million barrels last week to 298.7 million barrels, their lowest level since 1983, according to US Department of Energy data released Monday.
The decline followed a draw of about 2.8 million barrels in the previous week, when inventories stood at 304.8 million barrels.
The drawdowns are part of Washington's commitment to release 172 million barrels from the SPR under a coordinated International Energy Agency action aimed at easing global supply disruptions and elevated energy prices.
The broader initiative involves the release of 400 million barrels of oil and refined products from participating countries' emergency reserves.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
