WTI crude oil futures have experienced a notable increase as geopolitical tensions between the United States and Iran escalated once again. On Wednesday, oil prices climbed, extending gains from the previous trading session, driven largely by missile attacks launched by Iran towards Kuwait and Bahrain. The attacks did not hit their targets, but the United States responded with strikes on Iran’s Qeshm Island, intensifying concerns about stability in the Middle East.
At 03:30 GMT, Brent crude futures rose by 81 cents, reaching $96.81 per barrel, while WTI crude futures advanced by 91 cents to $94.67 per barrel. Both benchmarks marked their highest levels in a week. Market analysts note that the stalled negotiations between Washington and Tehran have added to the risk premium embedded in oil prices. The International Energy Agency (IEA) has also issued warnings about critically low global oil inventories, which could tighten further as summer demand peaks.
Emril Jamil, a senior oil analyst at LSEG, pointed out that ongoing diplomatic deadlock combined with inventory concerns is pushing benchmark prices higher. The IEA’s oil industry head emphasized that if current stock draw trends continue, global supplies could reach dangerously low levels ahead of the peak consumption period. This supply risk is compounded by limited maritime transit through the Strait of Hormuz, a key oil shipping route.
ANZ Bank’s senior commodity strategist Daniel Hynes highlighted that efforts to reopen this strategic waterway face significant obstacles because Iran has laid mines in large areas of the channel. Although there has been a slight increase in vessels attempting passage, total traffic remains well below pre-conflict volumes. This disruption contributes to uncertainty around oil supply chains and adds upward pressure on prices.
On the supply front in the United States, crude inventories declined for the seventh consecutive week as reported by market sources citing data from the American Petroleum Institute. Crude stockpiles fell by approximately 6.8 million barrels during the week ending May 29. Official U.S. government figures on inventory levels were expected later Wednesday to provide further clarity on supply conditions.
The ongoing conflict between the U.S. and Iran has remained at a stalemate for over three months despite a fragile ceasefire agreement. Iranian media reported that Tehran had not communicated with Washington for several days, though U.S. officials indicated that negotiations were still ongoing behind the scenes. This uncertainty continues to weigh heavily on global energy markets.
In summary, WTI crude oil futures have surged amid renewed Middle East hostilities and tightening supply conditions both globally and within the United States. With diplomatic efforts stalled and inventories declining ahead of high summer demand, market participants remain cautious about further price volatility in the coming weeks.
