Brent crude climbed 1.2% to $95.76 a barrel on Wednesday after the U.S. and Iran traded fresh strikes, deepening a seven-month war that has choked shipping through the Strait of Hormuz. OPEC+ is expected to leave its October output policy unchanged at a meeting on Sunday, even as U.S. crude inventories post a bigger draw than analysts expected.
Brent crude futures rose $1.12, or 1.2%, to $95.76 a barrel by 1:06 p.m. ET on Wednesday, while U.S. West Texas Intermediate crude gained 92 cents to $91.18. The moves came after U.S. forces struck Iran's southern coast and Iran fired on American bases across the region, the biggest exchange of fire between Tehran and Washington since July in a war now in its seventh month.
Both benchmarks swung hard through the session. Brent and WTI moved between gains of as much as $2 a barrel and losses of $1 a barrel. Session highs for both marked their highest levels since July 24.
Strait of Hormuz traffic thins out
The war began with joint U.S.-Israeli strikes on Iranian targets in late February, and Iran has since effectively shut down shipping traffic through the Strait of Hormuz, a waterway that carried about a fifth of global oil and LNG consumption before the conflict. On Tuesday, only four commodity vessels transited the strait, well below the 10-day average of about 13, according to preliminary Kpler shipping data. Two crude oil tankers hit sea mines and were disabled while attempting to pass through, Iran's Revolutionary Guards said in a statement carried by state media.
Iran has also added more ships to a list it deems non-compliant, subjecting them to fines, confiscation or detention if they try to sail through the strait. Still, 17 million barrels of oil transited the strait on Monday, the largest volume since the war began, U.S. Energy Secretary Chris Wright said.
OPEC+ set to hold policy, inventories fall
OPEC+ is likely to keep its oil output policy unchanged for October at a meeting on Sunday, three sources close to the matter told Reuters, as the producer group completes the unwinding of one layer of production cuts this month and turns its focus to 2027 quota negotiations. In August, Iraq boosted its oil exports, and shipments were set to climb again in September as wide profits and Iranian approval for its tankers encouraged buyers.
Meanwhile, U.S. crude oil inventories fell by 4.5 million barrels last week, the Energy Information Administration said Wednesday, compared with analysts' expectations for a 1.1 million-barrel draw in a Reuters poll. Russia also carried out a heavy missile and drone attack on energy infrastructure in Ukraine's southern Odesa region overnight, transmission system operator Ukrenergo said.
Source: Investing.com
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