Crude Oil Prices Surge on Renewed Iran Tensions
Crude oil prices surged on Wednesday, as concerns over supply disruptions in the Middle East due to renewed U.S.-Iran tensions led to a sharp increase. Brent crude futures rose $2.70, or 3.2%, to $86.79 a barrel, while West Texas Intermediate (WTI) futures gained $2.65, or 3.3%, to $81.91 as of 6:45 a.m. GMT.
The rally reversed part of Tuesday's steep decline, when hopes for diplomatic progress pushed both benchmarks to two-week lows. However, sentiment shifted after the United States and Saudi Arabia struck Iran-backed groups in Iraq and the U.S. military said it intercepted Iranian missiles aimed at American forces. Iran also rejected an Oman-backed proposal involving oversight of the Strait of Hormuz.
Shipping data reinforced the supply concerns, with only eight commodity vessels passing through the Strait of Hormuz on July 28, while just one had crossed early Wednesday. Traffic through Bab el-Mandeb improved to its highest level in a week, but Houthi threats against Saudi shipping kept the Red Sea route vulnerable.
The short-term setup for Brent has strengthened, with the contract holding above the daily 200-period average near $83.17 to preserve momentum. The next resistance levels appear near $85.70 and $88.76, followed by a stronger barrier around $91.44. Traders may now watch whether Brent can turn that area into support.
WTI consolidated after an upside breakout overnight before consolidating near $83.02 inside a tightening triangle. A clear break above the triangle's upper boundary near $83 to $84 would strengthen the bullish case and could bring the unfilled price gap above $86 into focus.