WEB DESK: Oil prices gained on Wednesday, rebounding from a seven-week low recorded in the previous trading session, amid escalating US-Iran tensions and positive US crude stock data.
Brent crude futures increased by 66 cents, or 0.7%, reaching $92.11 per barrel at 0406 GMT, while US West Texas Intermediate (WTI) crude climbed by 60 cents, or 0.7%, to $88.80 per barrel.
The rise followed recent US military strikes targeting Iranian positions after President Donald Trump pledged to retaliate for the downing of a US Apache helicoptera move that risks reigniting hostilities between Washington and Tehran. These military actions have shifted market focus back onto geopolitical risks and potential supply disruptions, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“Although diplomatic negotiations are ongoing, recent military exchanges have reintroduced a geopolitical risk premium into the oil markets,” Sachdeva explained.
Iran has warned it would escalate hostilities if Israel continues its offensive against Hezbollah in Lebanon. The ongoing Israeli campaign against the Iran-backed militia has hampered US efforts to extend a fragile ceasefire in the broader US-Israeli conflict with Iran into a lasting resolution.
With no immediate diplomatic breakthrough in sight and global oil markets tightening daily, analysts from ING noted that oil prices could see further gains, especially if disruptions persist into the third quarter when seasonal demand tends to increase.
Meanwhile, Iran continues to obstruct most shipping through the Strait of Hormuz—a critical chokepoint that typically transmits about 20% of the world’s crude oil and liquefied natural gas—while the US maintains its own blockade of Iranian ports.
US Energy Secretary stated on Tuesday that despite ongoing tensions, shipping activity in the Gulf and oil exports via the Strait of Hormuz are on the rise, even as Washington and Tehran remain far from a deal to end their prolonged standoff.
In addition, US crude inventories declined for an eighth consecutive week, according to data from the American Petroleum Institute released Tuesday. The stocks fell by approximately 9.12 million barrels for the week ending June 5, while gasoline inventories also dropped by 1.19 million barrels, according to sources speaking anonymously.
The US has played a key role as a marginal supplier of crude and petroleum products during the conflict, increasing exports to Asian and European markets. However, diminishing US inventories could limit export capacity and support higher prices in the coming weeks.
