Global crude benchmarks rose on Wednesday as diplomatic prospects dimmed and regional shipping attacks raised concerns about potential supply disruptions, despite data showing increased US crude inventories.
International oil markets moved higher Wednesday morning as geopolitical tensions in the Middle East offset signals of adequate supply in the United States. Brent crude futures advanced 72 cents to $89.63 a barrel, while US West Texas Intermediate crude gained 71 cents to $83.91, continuing an upward trend that saw both contracts settle above $1 higher on Tuesday—their strongest closes since late July.
Market sentiment has been shaped by deteriorating prospects for a US-Iran peace agreement, combined with maritime incidents that have heightened supply concerns. Iran's top security official, Mohsen Rezaei, stated that the strategically vital Strait of Hormuz would remain closed unless Washington agreed to Iranian conditions, including releasing frozen assets and addressing regional conflicts. Separately, attacks on vessels in the Strait of Hormuz and the Bab el-Mandeb Strait were reported by both US and Yemen-aligned Houthi sources. Shipping traffic through the Hormuz strait has dropped significantly, with only six vessels passing through on Monday compared to an average of 11 over the preceding ten days—a sharp decline from pre-conflict levels of 125 to 140 daily transits.
On the supply front, market observers noted conflicting signals. Industry sources citing American Petroleum Institute data reported that US crude inventories rose substantially by 9.1 million barrels in the week ended August 7, while gasoline and distillate stocks declined. This crude stockpile increase exceeded market expectations and may provide some relief regarding supply tightness, according to Haitong Futures. The US Energy Information Administration is scheduled to release official inventory figures Wednesday afternoon. Looking ahead, the EIA projects that Middle East crude supply disruptions of approximately 600,000 barrels daily may persist through the end of 2027.
