Oil up nearly 1% as US and Iran trade fresh strikes

• Brent crude rose 0.92% to $95.52 per barrel while WTI climbed 0.89% to $91.02, following Tuesday's gains of more than $4 - the largest single-day increases since late July
• The U.S. launched strikes against Iranian targets in response to IRGC attacks on commercial shipping in the Strait of Hormuz and American service members, prompting Iranian retaliation with ballistic missiles and drone attacks
• U.S. crude inventories fell by 2.6 million barrels in the week ended August 28, while two tankers were attacked departing the Strait of Hormuz on Monday, forcing traders to seek alternative crude shipments

Oil Prices Rise Nearly 1% on U.S.-Iran Escalation and Supply Concerns

Oil prices climbed approximately 1% in early Wednesday trading, building on Tuesday's sharp gains, as U.S.-Iran military exchanges heightened concerns over potential supply disruptions in the Middle East.

Key Price Movements:

• Brent crude futures rose 87 cents (0.92%) to $95.52 per barrel
• WTI crude futures increased 80 cents (0.89%) to $91.02 per barrel
• Both benchmarks surged over $4 on Tuesday, marking Brent's largest gain since July 24 and WTI's largest since July 23

Geopolitical Developments:

The United States launched strikes against Iranian targets overnight, citing recent IRGC attacks on commercial shipping in the Strait of Hormuz and American military personnel. Iran responded with ballistic missile attacks on a U.S. base in Jordan and drone strikes on a facility in Bahrain, though U.S. officials reported no American casualties. Jordan intercepted 10 of 13 missiles entering its airspace.

Critical Supply Route Impact:

The Strait of Hormuz, which previously carried approximately one-fifth of global oil consumption, has been effectively closed to commercial shipping by Iran. The IRGC warned that U.S. attacks would further restrict traffic through this vital waterway. Two tankers departing the strait were attacked Monday, forcing traders to seek alternative crude shipments.

U.S. Inventory Data:

American Petroleum Institute data showed U.S. crude inventories fell 2.6 million barrels for the week ended August 28, with distillate stocks declining 265,000 barrels.

Market Implications:

The escalating conflict poses significant supply disruption risks, supporting elevated oil prices and potentially impacting global energy markets and inflation outlooks.