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US Oil Update: Crude Eases As US-Iran Strikes, Ship Attacks Threaten Supplies

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Crude oil futures were little changed in after-hours trading on Wednesday as renewed US-Iran military strikes and attacks on tankers in the Strait of Hormuz heightened fears of further disruptions to global crude supplies.

Front-month West Texas Intermediate crude eased by 0.5% to $90.63 per barrel, while Brent futures were up 0.7% to $95.32/bbl.

Soojin Kim, research analyst at MUFG, said that crude is now more than 30% higher since the Middle East conflict began in February, with refined-product markets facing even greater tightness.

US commercial crude oil inventories decreased by 4.5 million barrels to 424.5 mmbbls in the week ended Aug. 28, the Energy Information Administration said in its weekly report released Wednesday.

Crude inventories were about 1% above the five-year average for this time of year, the EIA said. The draw is significantly above Investing.com's estimate of a 400,000-barrel draw for the week ended Aug 28.

Hostilities in the Middle East remain elevated, with President Trump threatening more attacks if Iran responded to additional overnight strikes on Iranian targets by the US military on Tuesday.

Trump floated renaming the Hormuz after himself on Wednesday, but it is not yet clear how the US President would attempt to implement a name change in the strait.

The US Central Command said in a post on X that the strikes "follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members."

On Wednesday, Centcom said that the US military has redirected 86 commercial vessels, disabled three and boarded two to ensure compliance as of Sept. 2.

Iran's Islamic Revolutionary Guard Corps, in response to the latest strikes, attacked US military bases in Kuwait, Jordan, Bahrain, Kuwait and the UAE, and said its aim was now to drive American forces out of the Middle East.

On Wednesday, the IRGC said that two tankers were disabled after being struck by mines in the Hormuz, forcing their crews to abandon the vessels, multiple media reports said.

The IRGC Navy said it had already warned ships about the risks of navigating the mined channel, while signaling further action against vessels that ignore the warning.

Iran's Persian Gulf Strait Authority added a further 11 ships to its blacklist on Wednesday, barring the vessels from transiting through the Hormuz for "non-compliance."

PGSA, the authority set up by Iran to manage the strait, now prohibits 57 vessels from transiting the strategic waterway.

Saxo Bank strategists said that disruption fears remain the key price driver as commercial vessel traffic through the Hormuz remains curtailed.

On the supply front, US Treasury Secretary Scott Bessent said 17 million barrels of crude exited the Strait of Hormuz on Monday, while claiming that Iran doesn't control the strait.

US Energy Secretary Chris Wright reiterated that figure, adding that exports are averaging about 8 million b/d, with 4 to 5 million b/d bypassing the strait via pipelines.

"When you factor in bypass volumes, it suggests Persian Gulf oil flows are above pre-war levels," ING strategists said in a note on Wednesday, but said that these numbers are uncertain.

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Hormuz Shipping Slumps as Tanker Attacks, US Strikes Raise Risks

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Oil & Energy

US Oil Update: Crude Rallies After US Hits IRGC Targets, Tanker Attacks Stoke Supply Fears

Crude oil futures settled higher by over 5% in after-hours trading on Tuesday as the US military launched fresh attacks on Islamic Revolutionary Guard Corps targets in Iran and attacks on tankers stoked concerns over potential disruptions in the Strait of Hormuz.Front-month West Texas Intermediate crude rose by 5.7% to $90.68 per barrel, while Brent futures climbed 5.2% to $95.18/bbl.The US launched a fresh wave of strikes against targets in Iran on Tuesday, extending a back-and-forth of fighting with neither side prepared to cede control over the Strait of Hormuz."Today at 12 p.m. ET, U.S. forces began striking Islamic Revolutionary Guard Corps (IRGC) targets in Iran," the US Central Command said in a social media post on Tuesday.Centcom said the strikes followed attempted IRGC attacks on commercial shipping in the Hormuz and US service members.President Trump described the strikes as "large and powerful" in a Truth Social post on Tuesday, saying they were retaliation for Iran's attempt to add sea mines to the Strait of Hormuz and its missile attack on a US base in Jordan."The strikes are large and powerful, and in retaliation for the Iranians' failed attempt at adding sea mines to the Strait, which currently has no mines...," the US President said in a post on Truth Social.Trump also threatened a significantly larger response if Tehran retaliates, saying Iran would be hit "at a much harder and higher level" and warning that an even bigger attack was "waiting in the wings."Iran's state-owned IRIB reported that several explosions were heard east of Bandar Abbas and around Qeshm island.IRGC spokesperson Sardar Mohebi said in a post on X that the US will regret its latest attacks. "Severe punishment awaits the aggressors...," Mohebi said.Fueling bullish sentiment, the UK Maritime Trade Operations Center said that a tanker was struck by three unknown projectiles while transiting Hormuz on Monday. The maritime security agency said the tanker was sailing in the southern shipping lane near the Omani coast.The UKMTO also said that it had received a report of an incident involving a tanker and military forces in the Indian Ocean, off the Omani coast.Gelber & Associates said the two supertankers carrying Saudi crude each carried about 2 million barrels. The analysts said that the near-simultaneous attacks raised doubts about the safety of the Omani corridor being used to move barrels through the disrupted waterway.On the supply side, commercial shipping through the strategic waterway plunged by half at the end of August, the latest data from Kpler showed on Tuesday, with five confirmed vessel crossings on Aug. 31, down from 10 a day earlier. Four vessels entered the Middle East Gulf while one exited.Going forward, Soojin Kim, a research analyst at MUFG, said that persistent geopolitical tensions and tanker attacks are likely to keep a risk premium embedded in oil prices, with Gulf producers' ability to maintain exports remaining the key factor.

Oil & Energy

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