US-Iran Tensions Send Oil Prices Soaring Amid Supply Risks
Oil prices fluctuated on Wednesday, reaching their highest levels since July 24 due to ongoing military strikes between the US and Iran. The conflict has restricted world oil supply, with Brent crude futures rising 25 cents to $94.90 a barrel by 10:48 a.m. ET.
The Strait of Hormuz, a critical waterway that carries about a fifth of global oil and LNG consumed before the conflict, is still affected by the war. While some oil has been able to pass through the strait, traffic remains restricted, with four commodity vessels transiting on Tuesday down from 10 a day earlier.
Despite this, US Secretary of Energy Chris Wright claimed that 17 million barrels of oil transited the Strait of Hormuz on Monday, which he said was the largest volume since the war began. However, industry sources and shipping data indicate that Iraq has boosted its oil exports in August, with September shipments set to climb.
OPEC+ is likely to keep its oil output policy unchanged for October at a meeting on Sunday, as the producer group completes the unwinding of one layer of production cuts this month. In other news, Russia carried out a heavy missile and drone attack on energy infrastructure in Ukraine's southern region of Odesa overnight.
US crude oil inventories fell by 4.5 million barrels last week, compared to analysts' expectations for a 1.1 million-barrel draw, according to the Energy Information Administration.