Oil Prices Spike on Middle East Tensions and OPEC+ Pause
Oil prices surged on Wednesday following US and Saudi strikes on Iran-backed targets in Iraq. Brent crude futures rose $3.30, or 3.9%, to $87.39 a barrel at 0300 GMT, while US West Texas Intermediate crude gained $3.05, or 3.8%, to $82.31 a barrel.
According to ING analysts, the renewed momentum comes after the US announced that it had repelled a surprise attack on American troops. This has dampened expectations of a swift de-escalation of tensions in the Persian Gulf.
Iran's Revolutionary Guards leadership said they launched several ballistic missiles at a US air base and facilities linked to US Central Command in Jordan. Saudi Arabia also carried out 'targeted strikes' against Iran-backed groups in Iraq, accusing them of drone attacks on the kingdom's oil facilities.
U.S. crude inventories fell by around 3.3 million barrels in the week ending July 24, and OPEC+ is likely to suspend planned production increases for three months starting in October, according to sources cited by Reuters.