Oil prices edged higher on Wednesday after a sharp rally the previous session, as renewed U.S.-Iran military strikes raised fresh concern over tanker traffic through the Strait of Hormuz. U.S. crude inventories also posted a larger-than-expected weekly draw, adding a supportive fundamental layer to the geopolitical premium.
Brent crude settled 0.6% higher at $95.25 a barrel on Wednesday, taking a breather after a sharp rally in the prior session. U.S. West Texas Intermediate crude climbed 0.5% to $90.63. Both contracts had jumped more than 4% and 5% respectively in the previous session, touching their highest levels in about five weeks.
Strikes escalate around the Strait of Hormuz
U.S. Central Command said Tuesday it had completed a new wave of attacks against Islamic Revolutionary Guard Corps targets, including air defense sites, radar systems and communications sites. Iranian state media said the strikes killed 18 people and injured 108, citing the country's health minister, and added that Iran retaliated by hitting Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles.
President Donald Trump floated renaming the strait after himself in a social media post, then told reporters the U.S. had carried out a heavy attack overnight and remained prepared to strike again. Shipping data showed only around four commodity vessels transiting the Strait of Hormuz on Wednesday, well below the roughly 13-vessel ten-day average, with two tankers disabled after striking sea mines. Two Saudi-loaded supertankers, each carrying about 2 million barrels from Saudi Arabia's Juaymah terminal, were struck by unidentified projectiles Monday.
U.S. stockpiles post steep draw
Meanwhile, U.S. commercial crude inventories excluding the Strategic Petroleum Reserve fell 4.4 million barrels in the week of August 28 to 424.5 million barrels, well beyond the 1.1 million barrel decline analysts expected. Overall inventories including the SPR fell 7.5 million barrels to 711.1 million barrels, the lowest level since November 1983. Iranian crude exports have also thinned, with loadings falling to between 220,000 and 255,000 barrels per day in August from about 2 million bpd in March, Reuters reported.
U.S. Energy Secretary Chris Wright said 17 million barrels of oil flowed through the strait on Monday, though analysts noted ship-tracking data suggest more modest volumes. OPEC+ is expected to hold its output policy unchanged for October at a meeting on Sunday, as the group finishes unwinding one layer of production cuts. Traders are left tracking the conflict headline by headline rather than pricing a shift in the underlying supply-demand balance.
Sources: Commodities & Futures News, Investinglive RSS Breaking News Feed
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