Oil prices experienced a rebound on Wednesday, partially fueled by escalating concerns over shipping in the Red Sea. Recent tensions in the Red Sea and Bab al-Mandab strait have intensified worries regarding freight flows through these crucial waterways. The geopolitical instability in the region has added a risk premium to oil prices, pushing them higher amidst already volatile conditions.
By 7:37 GMT, Brent crude futures saw a 0.30 percent increase to $82.58 per barrel. Meanwhile, U.S. West Texas Intermediate crude futures (WTI)Â saw a 0.27 percent increase to $77.25 per barrel.
Fed policy uncertainty
Growing expectations that cuts to U.S. interest rates will take longer than initially anticipated have contributed to market uncertainty. Thus, concerns over the Federal Reserve‘s monetary policy have weighed on the outlook for oil demand, impacting oil prices and their movements.
Russia’s output cuts
Despite facing setbacks in oil refining, Russia has reaffirmed its commitment to output cuts as part of the agreement with the Organization of Petroleum Exporting Countries and its allies (OPEC+) to control oil prices. Refinery throughput in Russia has declined by 7 percent since the beginning of the year, highlighting the challenges geopolitical conflicts pose on oil-producing nations.
