Oil prices surge over 4% amid fresh Middle East flare-up and US inventory drop
Crude benchmarks jumped more than 4% on Wednesday as renewed Middle East tensions and a drawdown in U.S. crude stocks revived supply worries.
On Wednesday, global crude benchmarks rebounded sharply, with Brent gaining 4.41% to $87.80 a barrel and U.S. WTI up 4.23% to $82.61, erasing much of Tuesday’s slide. The rally was driven by renewed Middle East hostilities that revived worries about the Strait of Hormuz, a vital oil lane, after Saudi Arabia confirmed joint air strikes with U.S. Central Command on Iran-aligned militant sites in eastern Iraq. At the same time, American Petroleum Institute data showed U.S. crude inventories dropped roughly 3.3 million barrels in the week ending July 24, although gasoline and distillate stocks rose modestly.
Market participants also factored in expectations that OPEC+ could suspend its planned output hike for three months starting in October. The heightened risk prompted Gulf shipping operators to alter routes, boost onboard security and reassess insurance coverage. Meanwhile, President Donald Trump told one outlet that talks with Iran were progressing but warned of possible further strikes if negotiations fail, while Iran denied seeking talks. These developments collectively lifted oil prices and heightened inflationary pressure on global fuel markets.
Why it matters
Higher oil prices affect fuel costs worldwide, influencing inflation and economic stability.
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