A temporary ceasefire agreement expired on Monday and a senior Iranian official told Reuters that his country was moving to a "fully offensive" military posture due to the diplomatic stalemate, though there were no reports of fresh strikes by either side on Tuesday.
"The shipping risks are increasing again as attacks from Iran and Houthis remain prevalent in both key chokepoints, keeping oil prices supported in the near term," said June Goh, senior oil market analyst at Sparta Commodities, referring to the Strait of Hormuz and Bab el-Mandeb strait.
Shipping through Hormuz slowed, data showed on Wednesday, as most shipowners avoided the key waterway due to a lack of clear signalling on its reopening from a blockade.
"However, Gulf producers are finding alternative export routes to bring oil out to the Gulf of Oman," said Goh. "If sustainable, this could help increase shut-in production from these two producers."
To avoid the Strait of Hormuz, Iraq's cabinet approved mechanisms for exporting Iraqi crude through specialized international and local companies and via multiple export outlets, the government said on Tuesday.
The contracts under the new mechanism will run for three months starting September 1, according to a statement issued after the cabinet meeting.
Two Chinese shipping giants have stopped sending oil tankers through Hormuz and Bab el-Mandeb amid the conflict in the Middle East and are instead collecting oil cargoes outside the Gulf.
In the U.S., crude oil and distillate inventories fell, while gasoline stocks rose last week, market sources said, citing data from the American Petroleum Institute. API/S
Official inventory numbers from the U.S. Energy Information Administration are due at 10:30 a.m. ET (1430 GMT), with analysts polled by Reuters expecting crude stocks fell by about 600,000 barrels in the week ended August 14.
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