Oil prices surged in early Asian trading on Wednesday, recovering sharply from the previous session’s losses as renewed tensions in the Middle East and a bullish US inventory report increased concerns over global supply disruptions.
Brent crude futures climbed 4.59% to around $87.95 per barrel, while West Texas Intermediate (WTI) crude rose 4.58% to $82.89 per barrel.
The rally came after a period of declining prices following the United States’ decision to halt 13 consecutive nights of strikes on Iran, which had raised hopes of a possible diplomatic resolution between the two sides.
However, those expectations weakened after the US Central Command (CENTCOM) reported that Iranian forces launched multiple ballistic missiles targeting American military bases in the Middle East. The missiles were intercepted, and no US positions were damaged, according to CENTCOM.
The US and Saudi Arabia later carried out precision strikes against what they described as terrorist logistics and weapons facilities in eastern Iraq. Although the attacks did not directly target locations inside Iran, they marked a renewed escalation in regional tensions.
The latest developments pushed geopolitical risk back into oil markets, reversing some of the decline seen earlier as investors had priced in expectations of easing conflict.
Adding further support to crude prices was a decline in US oil inventories. The American Petroleum Institute (API) reported that US crude stockpiles fell by approximately 3.3 million barrels last week, indicating tighter supplies.
The Strategic Petroleum Reserve also released around 3.7 million barrels, bringing its stock levels to the lowest since March 1983.
Meanwhile, gasoline inventories increased by nearly 918,000 barrels, while distillate stocks rose by 355,000 barrels.
Market participants will now closely monitor further developments in the Middle East and the US Energy Information Administration’s (EIA) inventory report. A confirmation of falling crude stocks or additional military escalation could push prices higher.
Since the beginning of the Iran conflict, oil markets have remained highly volatile, with geopolitical developments continuing to dominate price movements. Analysts expect uncertainty to persist as traders assess risks to energy supplies and shipping routes.
