Oil prices jumped on Wednesday to the highest level in almost four weeks. Oil prices edged higher on the futures market, with both benchmarks closing above their levels from the end of July in their first such movement this year.

Escalating geopolitical tensions in the Middle East were a major contributor to the price rally. The United Arab Emirates Government’s decision to ban all financial and economic transactions with Iran, a direct reaction to recent regional missile attacks, caused a surge in market fears.

Competing stories about key transport corridors have added to market volatility. The White House recently said that the Strait of Hormuz is open and that there were no negotiations underway, but officials affiliated with the Iran Ministry of Foreign Affairs denied it. After a temporary ceasefire was suspended earlier this week, Iranian authorities indicated that they were changing to a “fully offensive” military posture, and in this regard, it is reported that they are considering a possible strike on European targets if the US administration raises the tension.

The Strait of Hormuz is the hottest issue in the global oil market. In the past, this chokepoint has been used to transport about 22% of the world’s oil and liquefied natural gas.The organizations that track oil and liquefied natural gas traffic, such as the International Energy Agency, are keenly watching the narrow passage. The latest tracking information showed that there were serious congestion issues, with just six commodity ships passing through the strait on Tuesday, compared with an average of 11 vessels passing through over the past 10 days.

Market analysts say the price of more than $91 a barrel is a reflection of a significantly increased risk premium, which could lead to prices rising back to the triple-digit mark. Russia is another source of constraints on world supplies beyond the Middle East. Although the shipping and logistics disruptions to the Black Sea port of Novorossiysk continued, crude volumes from the Russian western ports dropped to about 2.3 million bpd in the first half of August, which was 15% below the initial estimates.

But official U.S. Energy Information Administration data offered some relief to the world’s supply fears in the meantime. Crude inventories were up 4.4 million barrels last week to 428.8 million, the agency said, noting that the increase was driven by a 1.4 million-barrel increase in imports. Also, the U.S. refinery operating rate climbed one percentage point higher to 97.2%. The high capacity signals strong demand in the worldwide market, with international refiners competing for supplies of crude oil to make up for the tight market conditions due to the ongoing strikes in Ukraine against Russian refining facilities.