Oil prices rose during Asian trading on Wednesday, as supply concerns returned to the forefront after the United States carried out new strikes on Iranian targets near the Strait of Hormuz, in response to the downing of a U.S. military helicopter. This escalation raised doubts over the durability of the fragile calm in the region and pushed traders to reprice the geopolitical risk premium in the energy market.
Brent crude and West Texas Intermediate both advanced after sharp declines in the previous session, when prices had touched their lowest levels in around seven weeks. The rebound was driven by investor concerns that any broader escalation could quickly affect shipping activity and oil flows, especially as the Strait of Hormuz remains one of the world’s most vital energy routes.
Markets had initially treated the halt in attacks between Iran and Israel as a possible sign that the crisis was moving toward deescalation, which pressured crude prices in the previous session. However, the new U.S. strikes and Iran’s warnings of a response to any further military action brought caution back to the market, particularly as energy flows through the Gulf remain below normal levels despite improved vessel traffic in recent weeks.
Oil also received additional support from American Petroleum Institute data, which showed a sharp drop in U.S. crude inventories by 9.12 million barrels last week, a decline that clearly exceeded expectations. Gasoline inventories also fell, while distillate stocks increased, adding to market sensitivity toward any new disruption in supply.
Markets are now awaiting official inventory data from the U.S. Energy Information Administration, which will help determine whether the large inventory draw reflects real tightening in the supply and demand balance or a temporary reading linked to short term factors. Until these figures are released, oil prices are likely to remain highly sensitive to any military or political developments in the Gulf region.
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