Oil Prices Soar on Escalating US-Iran Tensions
Crude oil prices surged on Wednesday as renewed U.S.-Iran tensions revived fears of supply disruptions in the Middle East. Brent crude futures rose $2.70, or 3.2%, to $86.79 a barrel, while West Texas Intermediate futures gained $2.65, or 3.3%, to $81.91.
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 supply concerns, with only eight commodity vessels passing through the strait on July 28, while just one had crossed early Wednesday.
The Energy Information Administration will release official inventory figures at 10:30 a.m. ET, which could impact prices. A larger-than-expected crude draw would support prices, while rising crude and fuel inventories could limit the rally.