Oil prices rebound as fresh U.S. strikes on Iran revive supply concerns

Oil prices recover after sharp previous-session losses

As of 20:28 ET (00:28 GMT), Brent Oil Futures for August delivery were up 1.8% at $93.08 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 1.8% to $89.78 per barrel. Both benchmarks had fallen roughly 3% in the prior session, reaching their lowest levels in seven weeks.

The earlier selloff was driven by market expectations that tensions in the Middle East might ease after Iran and Israel agreed earlier this week to halt attacks following appeals from President Donald Trump. Traders had interpreted this pause in hostilities as a potential step toward a diplomatic resolution, reducing the immediate geopolitical risk premium in crude prices.

U.S. strikes on Iran refocus attention on Strait of Hormuz

Washington launched strikes on Iranian targets near the Strait of Hormuz on Tuesday, in response to the downing of a U.S. Apache helicopter, which U.S. officials said was caused by an Iranian drone attack. President Trump characterized the U.S. action as a “proportional” retaliation, while Tehran warned it would respond to any further military action.

The escalation has raised concerns that tentative progress toward de-escalation could unravel. Market attention remains centered on the Strait of Hormuz, a key transit route through which roughly one-fifth of global oil and liquefied natural gas flows.

U.S. Energy Secretary Chris Wright stated that vessel traffic and oil exports through the Gulf have been improving in recent weeks, but he noted that energy flows are still below normal levels and may take months to fully recover.

U.S. inventory draw adds support to crude prices

Oil prices also drew support from industry data indicating a substantial decline in U.S. crude inventories. The American Petroleum Institute reported a 9.12 million-barrel draw in crude stockpiles last week, significantly exceeding expectations for a 3.4 million-barrel decrease.

Gasoline inventories fell by 1.19 million barrels, while distillate stocks rose by 1.32 million barrels. The sharper-than-expected crude draw reinforced concerns that global inventories could tighten further if Middle East tensions intensify. Market participants are now awaiting official inventory figures from the U.S. Energy Information Administration, due later on Wednesday, for confirmation of the API data.

FAQ

What are current Brent and WTI prices?
As of 20:28 ET (00:28 GMT), Brent Oil Futures for August were trading at $93.08 per barrel and U.S. WTI crude futures at $89.78 per barrel, both up 1.8%.

Why did oil prices rebound on Wednesday?
Prices rebounded due to fresh U.S. strikes on Iranian targets near the Strait of Hormuz, which renewed concerns about supply disruptions and reversed some of the previous session’s losses.

How did U.S. crude inventories change last week?
According to the American Petroleum Institute, U.S. crude inventories fell by 9.12 million barrels last week, compared with expectations for a 3.4 million-barrel decline.

Why is the Strait of Hormuz significant for oil markets?
The Strait of Hormuz is a critical transit route through which roughly one-fifth of the world’s oil and liquefied natural gas flows, making it highly important for global energy supply security.