Oil Prices Climb as U.S. Strikes on Iran Intensify Mideast Supply Fears

Oil prices gained in early Wednesday trading as ongoing military confrontations between the United States and Iran stoked fears of broader conflict and potential disruptions to global energy supplies. The rise follows a report from the U.S. military that it had commenced its 11th consecutive night of strikes on Iranian military targets.

Geopolitical Tensions Escalate

International benchmark Brent crude futures rose 0.55%, or 50 cents, to trade at $91.51 a barrel, according to a Reuters report. U.S. West Texas Intermediate (WTI) crude futures climbed 0.36%, or 30 cents, to $84.64 a barrel. The gains build on a five-week high reached in the previous session.

The latest price movement was triggered by reports of fresh U.S. strikes late Tuesday U.S. time. These actions followed an announcement from the Kuwaiti army that its air defenses were actively intercepting Iranian drones. The persistent exchange of fire, which includes Iranian attacks on U.S. facilities in Bahrain, Kuwait, and Jordan, has heightened market anxiety over the stability of the region.

Widening Risks to Energy Chokepoints

Concerns over supply security have intensified after Yemen’s Iran-aligned Houthis threatened to target vessels carrying Saudi oil through the Bab el-Mandeb Strait, a critical maritime chokepoint. The group also announced a naval blockade of Saudi Arabia, opening a new front in the conflict.

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The Bab el-Mandeb waterway has grown in importance for Saudi crude exports as traffic through the Strait of Hormuz has declined since a U.S.-Iran ceasefire collapsed earlier this month, according to the report. These developments add a significant geopolitical risk premium to oil prices.

US Inventory Data in Focus

In other market-moving news, preliminary data from the American Petroleum Institute indicated that U.S. crude and distillate inventories rose last week, while gasoline stockpiles drew down, according to market sources. Investors are now awaiting official inventory figures from the U.S. Energy Information Administration (EIA) due later on Wednesday for a clearer picture of U.S. demand.

Separately, U.S. Defense Secretary Pete Hegseth stated that the country's war in Iran has cost $37.5 billion to date, an increase of nearly $8 billion from the last public estimate.