Oil prices rise as US-Iran conflict fuels supply disruption fears
Oil prices edged higher in early trading on Wednesday as concerns over global supply intensified amid escalating tensions between the United States and Iran. The rise followed reports that U.S. forces had carried out a 11th consecutive night of strikes on Iranian military targets, while Kuwait said its air defences intercepted Iranian drones.
Brent crude gained 50 cents, or 0.55%, to trade at $91.51 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 30 cents, or 0.36%, to $84.64 in light trading.
The increase comes after both benchmarks closed at their highest levels in five weeks on Tuesday, following U.S. strikes on military sites in southern and western Iran and Iranian attacks targeting U.S. facilities in Bahrain, Kuwait and Jordan.
The U.S. military said its latest round of strikes began late Tuesday U.S. time, corresponding to early Wednesday in Iran. Around the same time, Kuwait announced that its military had intercepted Iranian drones entering its airspace.
The continued exchange of attacks has heightened concerns about disruptions to global energy supplies, particularly after Yemen’s Iran-backed Houthi rebels threatened to target ships transporting Saudi oil through the Bab el-Mandeb Strait and declared a naval blockade against Saudi Arabia.
The Bab el-Mandeb, located at the southern entrance to the Red Sea, has become increasingly important for Saudi oil exports as shipping through the Strait of Hormuz has declined sharply since the collapse of the U.S.-Iran ceasefire earlier this month.
Meanwhile, U.S. Defence Secretary Pete Hegseth revealed that Washington’s military campaign against Iran has now cost $37.5 billion, nearly $8 billion more than the previous public estimate.
Separately, data from the American Petroleum Institute showed that U.S. crude oil and distillate inventories increased last week, while gasoline stockpiles declined. Investors are awaiting official inventory figures from the U.S. Energy Information Administration later on Wednesday.
Source: Reuters
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