Crude oil prices rallied sharply on Wednesday, pushing Brent to $95 per barrel, as escalating disruption across critical chokepoints in the Middle East and pipeline attacks on Russia's Black Sea coast strained global energy markets.
Brent futures surged 4.2% to $94.80 per barrel. Murban futures gained 5% to $90.06/bbl.
"Crude oil prices rallied, as risks of further supply disruption mounted," ANZ analysts noted.
Following recent attacks on vessels in the Strait of Hormuz, the narrow waterway has been deserted, with zero commercial ships transiting, analysts said.
The prospect of a diplomatic off-ramp also evaporated after Iranian attacks on US military sites prompted President Trump to reportedly declare that Tehran would face severe consequences, while dismissing reports of an imminent meeting.
Compounding the crisis, Yemen's Houthi militants reportedly issued warnings advising shipowners not to call at Saudi Arabian ports, threatening maritime traffic in the Red Sea and prompting at least three tankers to execute u-turns.
This threatens Saudi Arabia's primary alternative export lifeline. Shipments via its Red Sea Yanbu terminal had reached record levels of 5.9 million barrels per day in the week ending July 17 before slipping to 5.5 mb/d by July 20, Bloomberg reported.
Adding to global supply strains, disruption also surfaced outside the Middle East following an attack on the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, which handles roughly 1.8 mb/d of Kazakh exports.
"The risks to supply sent Brent crude above $90/bbl, with further gains likely if the disruptions in the Middle East persist," ANZ analysts noted.
In response to the tightening supply crisis, India has intensified its reliance on Russian crude, with June imports topping 2.3 mb/d and holding near that pace through July despite ongoing western sanctions pressure.
On the supply side, data from the American Petroleum Institute revealed Tuesday that US crude oil inventories increased by 2.603 million barrels in the week ended July 17.
The oil market now awaits the US Energy Information Administration's petroleum inventory report, scheduled for release on Wednesday.