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Oil prices climbed for a third straight session on Wednesday, with Brent moving above $95 a barrel and US crude crossing $91 as fresh US-Iran strikes raised fears of a deeper supply shock. Brent crude futures rose 87 cents, or 0.92%, to $95.52 a barrel by 0008 GMT, while US West Texas Intermediate (WTI) gained 80 cents, or 0.89%, to $91.02. The oil prices move came after both contracts surged more than $4 on Tuesday, with Brent recording its biggest daily gain since July 24 and WTI its largest since July 23.

The latest oil prices rise followed an overnight exchange of strikes between Washington and Tehran, marking the most serious escalation in weeks. The US said it had launched a series of airstrikes against targets in Iran, while Iran responded with attacks on American military positions and other US-linked assets across the region. The renewed fighting has sharply reduced hopes that tensions in the Middle East will ease quickly.

Oil prices rise as Iran war puts Strait of Hormuz supply at risk

At the centre of the latest concern is the Strait of Hormuz, a vital oil route that carried about one-fifth of the world’s oil consumption before the conflict. Iran has effectively closed the waterway to commercial shipping, and the IRGC said the new US attacks would further restrict traffic through the strait. The threat has added to worries that the oil prices surge could deepen if crude shipments remain disrupted.

The situation worsened after two tankers leaving the Strait of Hormuz were attacked on Monday. The incidents caused further disruption to oil supplies and forced traders to look for alternative crude shipments. US Central Command said, “The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.”

Oil prices react as Tehran targets US bases across Gulf

Iran’s IRGC said it launched a ballistic missile attack on a US military base in Jordan and claimed that a large number of US forces were killed. Iranian state media also reported a large-scale drone attack on a US base in Bahrain. Jordan’s military said its air defences intercepted 10 of 13 ballistic missiles that entered its airspace. Two US officials said no American casualties had been reported so far, while Kuwait said its armed forces were responding to hostile drone activity.

The attacks followed a weekend flare-up, the first direct exchange of fire since July. The latest escalation has given oil prices another reason to remain elevated as traders assess the possibility of wider attacks affecting shipping and energy infrastructure across the Gulf.

Oil prices stay under pressure despite US inventory draw

The United States, the world’s largest oil producer, also reported a decline in crude inventories. US crude stocks fell by 2.6 million barrels in the week ended August 28, while distillate inventories, including diesel and heating oil, dropped by 265,000 barrels, according to market sources citing American Petroleum Institute data.

For oil prices, the combination of tighter US inventories and the growing geopolitical risk around the world’s key oil-shipping route is adding to the pressure. With Brent already above $95 and WTI above $91, traders are closely watching whether further military action could disrupt more supplies and push oil prices even higher.

(with inputs from Reuters)

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