Oil Prices Rise Above $95 as Middle East Risks Grow
Global oil prices climbed above $95 per barrel on Wednesday for the first time since June 11.
The latest rally came as investors assessed the escalating conflict between the United States and Iran. Markets were also concerned about growing threats to energy supplies across the Middle East.
At 05:49 ET, September Brent crude futures rose 4.4% to $95.04 per barrel. Meanwhile, U.S. West Texas Intermediate crude futures gained 4.6% to $88.20 per barrel.
Both contracts were on track for a fourth consecutive daily increase. Oil prices have also risen in six of the past seven trading sessions.
U.S. Strikes on Iran Support Oil Prices
U.S. forces said they completed an 11th consecutive night of strikes against Iranian military targets early on Wednesday.
The attacks reportedly hit missile and drone launch sites, air defense systems, command facilities, and other military infrastructure.
The continued campaign suggests that Washington is increasing military pressure on Tehran. However, regional mediators are still trying to revive diplomatic negotiations.
President Donald Trump expressed doubts about those efforts on Tuesday. He said the United States had no interest in meeting with Iranian officials under the current conditions.
Rubio Accuses Iran of Breaking Shipping Agreement
U.S. Secretary of State Marco Rubio said Washington remained open to diplomacy.
However, he accused Iran of violating an agreement related to commercial shipping through the Strait of Hormuz.
The comments added to market concerns because the Strait of Hormuz is one of the world’s most important oil transit routes.
Any prolonged disruption could reduce global crude supplies and increase shipping costs.
Iran Continues Regional Retaliation
Iran has continued retaliatory attacks against U.S. military positions across the Middle East.
Targets have reportedly included facilities in Bahrain, Kuwait, and Jordan.
The wider geographical spread of the conflict has increased fears that other countries and energy routes could become involved.
As a result, traders are adding a larger geopolitical risk premium to oil prices.
Houthi Blockade Threatens Saudi Oil Exports
Investors are also monitoring Yemen’s Iran-aligned Houthi movement.
The group has threatened a naval blockade targeting shipping linked to Saudi Arabia in the Red Sea.
Some oil tankers have already changed course in response to the threat. This has raised concerns about exports from one of the world’s largest crude oil producers.
ING analysts said such a blockade could force vessels to use alternative routes through the Suez Canal.
Longer journeys would increase travel times, insurance costs, and fuel expenses for tankers heading toward Asia.
Strait of Hormuz Disruptions Add to Supply Fears
Maritime traffic is already facing disruption near the Strait of Hormuz.
The waterway carries a significant share of global oil exports. Therefore, any restriction on vessel movement could have an immediate impact on international energy markets.
The combination of threats in both the Strait of Hormuz and the Red Sea has created additional uncertainty for oil traders.
Black Sea Supply Disruptions Increase Pressure
Concerns over global oil supplies were also supported by fresh disruptions in the Black Sea.
The Caspian Pipeline Consortium suspended crude oil loadings after repeated attacks on tankers near its Russian export terminal.
The disruption affected Kazakhstan’s oil exports and added another source of pressure to an already tight global supply outlook.
ING analysts noted that risks now extend across the Persian Gulf, Red Sea, and Black Sea.
They suggested that Brent crude could remain undervalued if these disruptions continue into August.
U.S. Crude Inventories Unexpectedly Increase
Despite the geopolitical supply concerns, data from the American Petroleum Institute showed an unexpected rise in U.S. crude oil inventories.
Stockpiles increased by 2.603 million barrels during the previous week.
Analysts had expected inventories to fall by approximately 1.5 million barrels. The result marked the first inventory increase in two weeks.
Rising inventories can sometimes place downward pressure on oil prices because they suggest that supply is exceeding demand.
EIA Inventory Report Comes Into Focus
Investors will now turn their attention to official U.S. crude oil inventory data from the Energy Information Administration.
The report could help determine whether domestic oil supplies are continuing to build.
Another large increase could limit the oil rally. However, further military escalation or shipping disruptions may continue to support prices even if inventories rise.
For now, geopolitical risks remain the main driver of the crude oil market.
