Key Moments
- Brent September futures advanced 3.4% to $94.13 per barrel, while WTI climbed 3.7% to $87.42 per barrel as of 04:12 ET (08:12 GMT).
- Escalating U.S.-Iran military actions and threats of a Saudi-focused naval blockade in the Red Sea heightened concerns over Middle East crude flows.
- American Petroleum Institute data showed a 2.603 million-barrel build in U.S. crude inventories, against expectations for a 1.5 million-barrel draw.
Prices Near Six-Week Highs
Oil futures traded close to six-week highs on Wednesday, supported by growing worries that widening conflict in the Middle East and new disruptions in the Black Sea could tighten global crude supplies.
At 04:12 ET (08:12 GMT), Brent crude futures for September delivery were up 3.4% at $94.13 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 3.7% to $87.42 per barrel.
Both benchmarks were on track for a fourth straight session of gains and were hovering around their highest levels since June 11. Each contract had advanced in six of the previous seven trading days.
| Contract | Price (per barrel) | Move | Time |
|---|---|---|---|
| Brent (Sep) | $94.13 | +3.4% | 04:12 ET (08:12 GMT) |
| WTI | $87.42 | +3.7% | 04:12 ET (08:12 GMT) |
U.S.-Iran Tensions Escalate
U.S. forces said they carried out strikes on Iranian military assets for an 11th consecutive night early Wednesday, targeting missile and drone launch sites, command-and-control hubs, air defense installations, and other infrastructure. The operations suggest Washington is ramping up pressure on Tehran even as efforts continue to explore a diplomatic way out of the crisis.
On Tuesday, President Donald Trump struck a downbeat tone on those diplomatic efforts, stating that the U.S. had “no interest in meeting” with Iran. On Wednesday, comments from U.S. Secretary of State Marco Rubio also underpinned the move higher in crude. Rubio reiterated that Washington remained open to diplomacy but charged that Tehran had violated an agreement on shipping through the Strait of Hormuz.
Tehran, in turn, kept up retaliatory strikes against U.S. military positions across the region, including in Bahrain, Kuwait and Jordan, adding to the sense of instability around key energy corridors.
Red Sea and Strait of Hormuz Shipping Risks
Market participants were also tracking threats from Yemen’s Iran-aligned Houthi movement, which warned of a naval blockade affecting Saudi-linked vessels in the Red Sea. The warning led some tankers to adjust their routes and stoked concern about potential interruptions to exports from one of the world’s largest oil exporters.
“This would force tankers to enter and exit the Red Sea via the Suez Canal, adding significant time and expense to voyages to Asia,” ING analysts said in a note.
The blockade threat is unfolding while maritime traffic is already being affected by conflict around the Strait of Hormuz, a vital chokepoint for global crude shipments.
Black Sea Disruptions Add to Supply Concerns
In addition to Middle East tensions, fresh disruptions to Kazakhstan’s crude flows through the Black Sea contributed to the bullish tone in oil. The Caspian Pipeline Consortium (CPC) halted loadings after repeated attacks on tankers at its Russian export terminal, raising another potential constraint on available supply.
“Factoring in the renewed disruptions from the Persian Gulf, risks to Saudi crude exports from the Red Sea, and developments in the Black Sea, one may argue that Brent at just over $91 a barrel is undervalued. Particularly if these disruptions persist into August,” the ING analysts added.
U.S. Inventory Data in Focus
On the inventory front, the American Petroleum Institute reported on Tuesday that U.S. crude stockpiles increased by 2.603 million barrels last week. Analysts had been expecting a draw of 1.5 million barrels, and the data marked the first weekly build in two weeks.
Traders will be watching for confirmation from official U.S. figures, with attention turning later on Wednesday to the Energy Information Administration’s inventory report.
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