US oil prices climb nearly $3 amid Middle East supply worries
Synopsis
US oil prices rebounded nearly $3 in early trade after a sharp selloff the previous session, as supply disruptions linked to the U.S.-Israeli conflict with Iran continued to constrain Gulf exports and keep energy markets volatile.
US oil prices climbed sharply in early trading on Wednesday as supply disruptions linked to the U.S.-Israeli conflict with Iran tightened Gulf exports. The rebound followed a steep selloff in the previous session and underscores the volatility gripping global crude markets as investors track developments around the Strait of Hormuz and potential supply shocks.
Key highlights
- US oil prices rose about $2.90 or 3.5% in early trading
- WTI crude climbed to $86.33 per barrel
- Markets remain volatile after an 11% plunge in the previous session
- Conflict around the Strait of Hormuz raises supply concerns
- Analysts see crude trading in a $75–$105 range in the near term
U.S. West Texas Intermediate crude (WTI) rose $2.90 per barrel, or about 3.5%, to $86.33 in early trading on Wednesday.
The rebound came after both WTI and Brent crude plunged more than 11% on Tuesday, marking their steepest percentage decline since 2022. The drop followed comments from Donald Trump, who predicted the war with Iran could end quickly.
Military escalation intensifies regional risks
Military activity in the region intensified on Tuesday as the United States and Israel launched what officials described as the most intense airstrikes of the conflict against Iranian targets.
The US military also said it had eliminated 16 Iranian vessels suspected of laying naval mines near the Strait of Hormuz, a critical shipping route for global energy supplies.
Trump has repeatedly said the United States is prepared to escort oil tankers through the Strait of Hormuz if necessary. However, sources told Reuters the United States Navy has declined requests from shipping companies for military escorts for now, citing elevated security risks in the region.
Why the Strait of Hormuz matters
The Strait of Hormuz is one of the world’s most important oil transit chokepoints.
Roughly one-fifth of global oil and liquefied natural gas shipments pass through the narrow waterway, meaning any disruption can quickly tighten supply and push prices higher.
According to Wood Mackenzie, the conflict is currently reducing Gulf oil and refined product supply to global markets by about 15 million barrels per day.
If disruptions intensify, the consultancy warned that crude prices could surge to as high as $150 per barrel.
Analysts expect continued oil price swings
Tony Sycamore, market analyst at IG Group in Sydney, said crude markets are likely to remain highly volatile as geopolitical headlines continue to drive trading.
“We continue to expect crude oil to remain highly volatile, driven by headlines while trading within a wide range between $75ish and $105ish in the sessions ahead,” he said.
Oil prices swing wildly this week
Energy markets have experienced extreme volatility in recent sessions.
Crude prices surged above $119 per barrel on Monday, the highest level since June 2022, before tumbling sharply on Tuesday.
The dramatic price swings reflect uncertainty about whether Middle East supply disruptions will escalate or ease depending on developments in the conflict.
Governments are closely monitoring the impact of the crisis on global energy markets.
Officials from the Group of Seven (G7) countries have discussed the possibility of releasing emergency oil stockpiles if supply shortages worsen.
Emmanuel Macron, president of France, is expected to host a virtual meeting with other G7 leaders to assess the energy impact of the conflict and consider possible responses.
Markets watching supply data and shipping risks
Investors will closely monitor developments around the Strait of Hormuz, where tensions remain high, and shipping risks persist.
Any escalation in the conflict or further disruption to Gulf supply could push crude prices higher. Conversely, coordinated releases from strategic reserves may help limit gains.
Markets are also awaiting official US inventory data after industry figures from the American Petroleum Institute showed declines in US crude, gasoline and distillate stockpiles last week, signalling stronger demand.
FAQs
Q1. Why did oil prices rebound on Wednesday?
Prices rose after the previous session’s sharp 11% drop, as ongoing Middle East tensions kept supply risks in focus.
Q2. Why is the Strait of Hormuz crucial for oil markets?
Around 20% of global oil and LNG shipments pass through the Strait, making it a critical energy chokepoint.
Q3. How volatile are oil markets right now?
Extremely volatile, crude prices surged above $119 earlier this week before dropping more than 11% in a single session.
Q4. Could oil prices reach $150 per barrel?
Yes. According to Wood Mackenzie, prices could reach that level if Gulf supply disruptions intensify.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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