Oil price today: Brent crude hovers at $111 as drone strike on Saudi Aramco oil field triggers fresh supply concerns

Oil price today: Crude oil prices extended their rally for another session today and jumped 2.45 per cent to USD 111.49 a barrel after a drone strike on Saudi Field near Aramco raised supply concerns.

The US West Texas Intermediate (WTI) meanwhile, traded around USD 98.

The rise in crude prices following the attacks heightened concerns that escalating hostilities in West Asia could disrupt oil supplies, even as exports through the Strait of Hormuz have accelerated.

Brent crude, the global benchmark, has risen more than 80 percent this year after the US-Iran war disrupted oil flows from the Persian Gulf. The conflict is approaching its ninth month.

Putin agrees to resume US-mediated peace talks with Ukraine

Meanwhile, Russian President Vladimir Putin has agreed to resume US-mediated peace talks with Ukraine as soon as next month, the Kremlin said, after Putin met US envoy Steve Witkoff in Washington's latest push to stop Europe's bloodiest conflict since World War Two, Reuters reported.

"The ongoing talks between the US & Russia for a possible Ukraine peace deal has been the negative to crude prices lately as talks look to be progressing at least for now ... a peace deal between Ukraine & Russia could unlock the tight global diesel supplies that have been a major contributor to the crude bulls the past few weeks," Kissler added.

‘Iran fully prepared to defend itself’

On ‌Wednesday, Iran's ⁠Foreign Minister Abbas Araqchi told the Financial Times that Iran was fully prepared to defend itself and President Masoud Pezeshkian told state media the US could not expect dialogue while blockading and threatening Iran, the Reuters report said.

At least 18 vessel attacks were recorded over the past two weeks, Kpler data showed, while LSEG analysts warned that Iran was targeting tankers well beyond the Strait of Hormuz, reaching into the Gulf of Oman and jeopardising Gulf crude loadings and ship-to-ship transfers supporting regional loadings.

The Trump administration is offering to loan up to nearly a third of the 1-million-barrel US emergency heating oil reserve, the Department of Energy said on Wednesday, seeking to contain prices that have surged on diesel ⁠shortages due to the wars in Iran and Ukraine.

US crude stocks fell by 3.06 million barrels to 412.5 million barrels last week, the US Energy Information Administration said on Wednesday, compared with analysts' expectations in a Reuters poll for an 820,000-barrel draw.

Distillate stockpiles, which include diesel and heating oil, ⁠rose 1.68 million barrels in the week to 104.3 million barrels, versus expectations for a 1.16 million-barrel drop, EIA data showed.