Oil prices climbed 7% on Wednesday as airstrikes resumed in the Middle East and U.S. government data put crude inventories at their lowest level since 2018. President Donald Trump promised further strikes against Iran, while Tehran pressed its claim over shipping through the Strait of Hormuz.
Oil prices climbed 7% on Wednesday as airstrikes resumed in the Middle East, adding to worries about dwindling supply as U.S. government data showed crude inventories fell to a multi-year low.
Brent futures were up $6.16, or 7.33%, at $90.25 a barrel by 11:36 a.m. ET. U.S. West Texas Intermediate crude gained $5.40, or 6.81%, to $84.65 a barrel.
Trump promises further strikes against Iran
Prices surged even higher after Trump promised further strikes against Iran in an interview with Fox News. Iran's Revolutionary Guard had launched ballistic missiles at U.S. forces, which U.S. Central Command said were successfully intercepted.
The U.S. and Saudi Arabia launched strikes on Iran-backed groups in Iraq on Wednesday, blaming them for drone attacks on Saudi oil facilities. Those strikes came hours after the U.S. military said it had averted a surprise Iranian attack on U.S. troops in the region.
Crude stockpiles drop to lowest level since 2018
Crude stockpiles dropped by 7.2 million barrels to 404.5 million barrels last week, the lowest level since 2018, the Energy Information Administration said on Wednesday. Analysts had expected a 1.3-million-barrel draw.
Further supporting prices, OPEC+ is likely to halt oil output increases for three months starting in October, sources told Reuters, after the producer group completes the scheduled return of barrels following voluntary cuts.
Two chokepoints stay in focus
Tehran has ruled out Oman's proposal for regional joint management of the strait, a senior Iranian official told Reuters. Only a few commodity ships have transited the strait this week.
Bab el-Mandeb, an alternative route for Saudi oil shipments to Asia, saw five transits on Wednesday and 39 on Tuesday. Iran and the Houthis are trying to control traffic through both Hormuz and the southern Red Sea, the two choke points for oil exports in the Middle East.
Wednesday's move snapped a three-session losing streak for the U.S. contract. The global benchmark has risen 21% so far this month, according to FactSet data. Suvro Sarkar, head of energy research at DBS Bank, expects Brent to keep whipsawing in the $80-$100 per barrel range in the near term as the conflict ebbs and flows.
Sources: Reuters, CNBC, MarketWatch (snippet-based)
Trading involves risk.
Risk Disclaimer
