As of 02:18 ET (06:18 GMT) on Thursday, Brent Oil Futures for August delivery were up 0.8% at $93.88 per barrel, while West Texas Intermediate (WTI) crude futures rose 1% to $90.92 per barrel. Both benchmarks had gained more than 2% in early Asian trading before trimming some of the advance. Oil prices had already settled nearly 2% higher in the previous session.<\/p>\n
Tensions in the Middle East intensified after U.S. President Donald Trump stated on Wednesday that Washington would attack Iran \u201cvery hard\u201d if negotiations failed, followed by another round of U.S. strikes on Iranian targets overnight. Iran said it had responded with counterattacks on U.S. military targets at airbases in Kuwait and Bahrain.<\/p>\n
Iran\u2019s military then declared the Strait of Hormuz closed to all traffic, including oil tankers and commercial vessels, warning that any ship attempting passage would be targeted. The strait is described as one of the world\u2019s most important energy chokepoints, handling a substantial share of global seaborne crude exports. ING analysts noted that the developments suggest a deal remains distant and that energy flows from the Persian Gulf will stay heavily constrained.<\/p>\n
The latest U.S. strikes followed earlier attacks launched in retaliation for the downing of a U.S. Army Apache helicopter near the Strait of Hormuz. Trump also disclosed that the U.S. military had been secretly assisting in escorting oil shipments through the waterway and said more than 100 million barrels had transited under U.S. protection.<\/p>\n
Additional support for crude prices came from U.S. Energy Information Administration data released on Wednesday, showing crude inventories fell by 7.2 million barrels in the week ended June 5. This drawdown was more than double analysts\u2019 expectations for a decline of about 3 million barrels.<\/p>\n
Gasoline stockpiles rose by 0.2 million barrels during the week, while distillate inventories, including diesel and heating oil, fell by 0.2 million barrels.<\/p>\n
Investors are monitoring signs that higher energy costs are feeding into broader inflation. U.S. consumer inflation accelerated to 4.2% in May, reinforcing concerns that central banks may maintain interest rates at elevated levels for longer. Market participants are awaiting U.S. producer price data and weekly jobless claims later in the day for further indications on the inflation outlook and the potential path of Federal Reserve policy.<\/p>\n
Why did oil prices rise on Thursday?<\/strong> What is the significance of the Strait of Hormuz for oil markets?<\/strong> How did U.S. crude inventories change in the latest data?<\/strong> How are these developments linked to inflation concerns?<\/strong>
Oil prices rose due to heightened geopolitical tensions after new U.S. strikes on Iranian targets, Iran\u2019s declaration that it was closing the Strait of Hormuz to all vessel traffic, and a larger-than-expected draw in U.S. crude inventories.<\/p>\n
The Strait of Hormuz is described as one of the world\u2019s most important energy chokepoints, handling a substantial share of global seaborne crude exports, so any disruption there can significantly affect oil supply and prices.<\/p>\n
According to the U.S. Energy Information Administration, crude oil inventories fell by 7.2 million barrels in the week ended June 5, compared with expectations for a draw of around 3 million barrels.<\/p>\n
Higher oil prices contribute to increased energy costs, which can push overall consumer inflation higher. With U.S. consumer inflation at 4.2% in May, markets are concerned that central banks, including the Federal Reserve, may keep interest rates higher for longer.<\/p>\n