Oil prices edged lower on Wednesday after a strong rally in the previous session, as traders assessed renewed fighting between the United States and Iran and the risk of further disruptions to Middle East crude supplies.
Brent and WTI crude both remained near recent highs despite the modest pullback.
Oil Prices Ease After Strong Rally
Brent crude futures for November slipped around 0.2% to $94.48 per barrel, while West Texas Intermediate futures fell roughly 0.8% to $89.49.
Brent had earlier climbed as high as $97.04 per barrel.
Both major benchmarks surged nearly 5% in the previous session and reached their highest levels in about five weeks.
US-Iran Fighting Raises Supply Concerns
The latest price volatility followed a fresh round of US airstrikes against targets in Iran.
Tehran responded with missile and drone attacks against US forces in Jordan and Bahrain.
The exchange marked one of the most serious escalations between the two countries in recent weeks and renewed fears of a prolonged conflict.
Strait of Hormuz Remains a Key Risk
The conflict has increased concerns about oil tanker traffic through the Strait of Hormuz.
The waterway is one of the most important routes for global crude exports, making any disruption potentially significant for energy markets.
Those concerns intensified after two supertankers carrying Saudi crude were reportedly hit by unidentified projectiles while passing through the strait.
Each vessel had loaded about 2 million barrels of oil from Saudi Arabia’s Juaymah terminal.
Oil Flows Continue Despite Rising Tensions
ING analysts noted that crude shipments have continued moving through the Strait of Hormuz despite tensions between Washington and Tehran.
However, they warned that the rising level of confrontation creates a growing risk for tanker crossings.
The US energy secretary said around 17 million barrels of oil moved through the strait on Monday.
Some analysts, however, suggested that ship-tracking data pointed to lower volumes and said longer-term averages may provide a more reliable picture.
Diesel Markets Remain Under Pressure
Supply disruptions are also affecting refined products.
ING said reduced diesel exports from the Middle East and Russia could keep middle-distillate margins elevated and volatile.
The pressure could become more significant as seasonal demand strengthens.
That means energy markets may remain sensitive not only to crude supply but also to shortages in refined fuels such as diesel.
Iranian Crude Exports Fall Sharply
Iranian oil exports have also dropped significantly.
According to Reuters data cited in the report, Iranian crude loadings declined to between 220,000 and 255,000 barrels per day in August.
That compares with roughly 2 million barrels per day in March.
The steep decline highlights the extent to which geopolitical tensions have already affected Iranian oil shipments.
US Crude Inventories Decline
Meanwhile, US crude stockpiles fell by 2.6 million barrels during the week ending August 28, according to data from the American Petroleum Institute.
That reversed a 4.2 million-barrel inventory increase recorded in the previous week.
Gasoline inventories rose by approximately 300,000 barrels, while distillate inventories fell by roughly the same amount.
EIA Report Could Move Oil Prices Next
Traders are now waiting for the more closely watched weekly inventory report from the US Energy Information Administration.
The EIA data could provide fresh insight into the balance between domestic oil supply and demand.
A larger-than-expected inventory draw could support crude prices, while an unexpected build could reduce some of the recent upward pressure.
Oil Outlook Remains Tied to Geopolitical Risk
Oil prices remain highly sensitive to developments between the United States and Iran.
Although crude eased slightly on Wednesday, the broader market remains supported by concerns over the Strait of Hormuz, weaker Iranian exports and potential disruptions to refined fuel supplies.
Traders will now focus on whether tensions escalate further and whether upcoming US inventory data confirms tighter market conditions.
