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US Oil Update: Oil Extends Rally to Third Session Amid US-Iran Impasse

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Global crude oil prices advanced for a third consecutive session on Wednesday as energy markets continued to price in the growing risk premiums of an unresolved US-Iran diplomatic impasse.

Front-month West Texas Intermediate crude futures advanced by 1.3% to $94.86 per barrel, while Brent futures rose 1.3% to $97.25/bbl.

Market participants noted that renewed maritime and geopolitical friction in the Middle East has reinforced anxieties that global energy disruptions could persist into the medium term, especially as a lasting diplomatic resolution remains stubbornly elusive.

Beneath the volatile, headline-driven pricing, the physical crude market continues to contract sharply.

Commercial transit through the Strait of Hormuz remains heavily restricted, keeping a significant volume of Middle Eastern crude cut off from global supply networks and forcing international buyers to scramble for alternative barrels.

Data released late Tuesday by the American Petroleum Institute showed that US crude oil inventories plummeted by a massive 6.75 million barrels for the week ended May 29.

The energy market is now awaiting the US Energy Information Administration petroleum inventory report, scheduled for release later on Wednesday.

"While ongoing disruptions continue to support prices, any credible breakthrough and the return to normal export conditions from the Middle East could gradually drive crude prices to the downside," said Konstantinos Chrysikos, Head of Customer Relationship Management at Kudotrade.

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