Hormuz Tensions Send Oil Prices Soaring to $95.60 per Barrel
Oil prices surged on Wednesday after tensions escalated in the Middle East as the US and Iran clashed over Hormuz. The Brent oil contract rose to $95.60 per barrel, while the October WTI contract added 1% to $91.12, following a 5.2% surge the previous day. This marks the third straight advance for oil prices as traders price in the risk of supply disruptions through the strait.
US President Donald Trump said the US acted against Iran's efforts to plant mines in the strait and an assault on an American base, warning that additional strikes would be authorized if Tehran responded. Hours later, Iran struck back at Jordan, Bahrain, and Kuwait, which host US bases.
The Islamic Revolutionary Guard Corps stated that the renewed clashes have 'only tightened the lock' on Hormuz. The Strait of Hormuz is a crucial waterway for global oil and LNG trade, with about one-fifth of global oil passing through it. Despite some oil continuing to depart from the Persian Gulf, risks to shipping remain high.
US Treasury Secretary Scott Bessent said Iran's bankruptcy is in the 'acceleration phase,' while a document reviewed by Bloomberg showed that US crude inventories dropped by 2.6 million barrels last week. If official data confirms this, it would mark the first decline in five weeks.