Crude oil futures settled higher in after-hours trading on Wednesday as the US intensified strikes against Iranian targets, raising concerns over potential crude supply disruptions, while a smaller-than-expected draw in US crude inventories provided additional support.
Front-month West Texas Intermediate crude futures gained 1.3% to $80.34 per barrel, while Brent futures were up 1.3% to $85.85/bbl.
Gelber & Associates said that the market appears caught between improving sentiment and a technically important resistance zone, with traders looking for a catalyst strong enough to determine whether the rebound has further room to run.
US commercial crude oil inventories decreased by 1.7 million barrels to 409.7 mmbbls in the week ended July 10, the Energy Information Administration said in its weekly report on Wednesday, less than Investing.com's forecast of a 1.8-mmbbl draw.
Crude inventories are now about 6% below the five-year average for this time of year, the agency said.
On Wednesday, the US launched a fresh round of attacks on Iran, hours after President Trump said military strikes would intensify next week if Tehran does not cooperate in peace negotiations.
US Central Command said in a social media post on X that it had begun launching a wave of strikes against Iran at 6 a.m. ET.
Centcom said attacks were completed at 7:30 a.m. ET and the precision munitions were launched against Iran's coastal defense systems and cruise missile storage and launch sites on Greater Tunb Island.
On Wednesday, Trump said he would intensify the attacks against Iran until strikes on commercial vessels in the Hormuz stop. Centcom launched a second wave of attacks at 3 p.m. ET on Wednesday to further degrade Iranian military capabilities used to threaten vessel flow through the Strait og Hormuz.
Earlier, the US military carried out strikes late Tuesday as well, targeting dozens of military assets near the Hormuz and along the country's coastline in a seven-hour operation.
Meanwhile, Iran, in response, has launched a wave of attacks on multiple Gulf countries, and Kuwait is bearing the brunt of the military strikes as Tehran steps up its assault on US allies in the Gulf region after an interim peace agreement with Washington collapsed.
Soojin Kim, a research analyst at MUFG, said that with shipping through the Strait of Hormuz still heavily constrained and the conflict expanding across the region, markets are increasingly pricing in the risk of a prolonged supply disruption.
Commercial shipping activity in the Strait continues despite mounting security risks and a renewed US naval blockade targeting Iranian ports. The latest data from Kpler showed 21 confirmed crossings through the Strait of Hormuz on July 14, marking a modest increase from the previous day.
On Tuesday, the US Treasury Department imposed new sanctions on an Iranian shipping network that Washington accused of helping to evade previous sanctions on oil sales and other activities.
Treasury's Office of Foreign Assets said the measures imposed on the network of Mohammad Hossein Shamkhani build on sanctions the US issued in April and last year. The US has now sanctioned over 200 individuals, entities, and vessels operating under Shamkhani.