US Crude Inventories Build Amid Escalating Middle East Tensions

Oil prices have surged to $87.96 for West Texas Intermediate (WTI) and $92.04 for Brent, up 2.57% and 1.71%, respectively, amid escalating geopolitical tensions in the Middle East.

The recent escalation began when two oil tankers were struck by projectiles on Monday night, with a Saudi very large crude carrier being hit or stopped while transiting the US-facilitated southern Hormuz corridor.

Kpler reported that only five commodity transits occurred through Hormuz on Monday, against a 10-day average of 14, with zero liquid tankers among them. Despite the disruptions, traders estimate that 6-8 million barrels per day are still moving through the waterway, mainly from other Gulf producers.

A crucial data point is the build-up of US commercial crude inventories, which have risen by 21.9 million barrels in three weeks to 428.9 million, 1% above the five-year average for this time of year.