Oil Prices Spike on Ship Attacks, US Crude Inventories Rise
Oil prices rose on Wednesday after attacks on two ships in the Strait of Hormuz and the Bab el-Mandeb Strait. The incidents reinforced concerns about disruptions to Middle East supplies, which have been a source of anxiety for markets.
The United States and Yemen's Iran-aligned Houthis reported separate attacks on shipping in these crucial waterways. Iran's top security official said that the Strait of Hormuz would remain closed unless the US accepted Iran's conditions to end the war, including the release of its frozen assets.
Shipping data showed a significant drop in vessels transiting the Strait of Hormuz, with only eight ships passing through on Tuesday compared to 125-140 before the war. The National Oil Corporation in Libya reported that all fires at fuel storage tanks in the Zawiya oil complex had been brought under control.
However, market sources cited American Petroleum Institute data showing a sharp rise in U.S. crude inventories, which could ease concerns about supply tightness. Crude stocks rose by about 9.1 million barrels last week, while gasoline and distillate inventories fell by 1.5 million barrels and 596,000 barrels, respectively.
The EIA is expected to confirm these numbers later on Wednesday with its report at 10:30 a.m. ET. For longer-term supply, the EIA forecast significant disruptions to Middle East crude supplies persisting through 2027.