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US Oil Update: Futures Gain After Fresh US-Iran Strikes, Hormuz Attacks

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Crude oil futures climbed in midday trading on Wednesday, buoyed by growing supply disruption fears after a fresh exchange of US-Iran military strikes and an increase in attacks on tankers transiting the Strait of Hormuz.

Front-month West Texas Intermediate crude rose by 0.9% to $91.06 per barrel, while Brent futures were up 1.2% to $95.84/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 400,000 barrels 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.

"I'm not trying to force Iran to the bargaining table," Trump said in a social media post on Truth Social.

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."

CENTCOM said it struck air defenses, radar systems, maritime assets, mine-laying capabilities and communications sites.

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.

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

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.

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, along with 4 to 5 million b/d bypassing the strait through 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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