Oil benchmarks firmed on Wednesday as continued naval blockades and US-Iran military strikes once again underscored the fragility of global oil supply chains.
Front-month West Texas Intermediate crude futures advanced by 0.9% to $80.04 per barrel, while Brent futures rose 0.6% to $85.19/bbl.
"Trump has abandoned plans to impose a 20% levy on cargo transiting the Strait of Hormuz after Gulf allies urged him to reconsider," Saxo Bank analysts said.
"Instead, Trump said the expected revenue would be offset by forthcoming direct investment commitments from Gulf states, although no details were provided," they said.
Simultaneously, the US reinstated its blockade of Iranian ports and coastal waters, while the US Central Command launched a fresh wave of strikes against targets near the Strait of Hormuz and the Iranian coastline.
Market sentiment remains tempered by broader supply-side variables. While recent data from the American Petroleum Institute indicated a weekly drawdown of 564,000 barrels in US crude inventories, traders are awaiting official government figures from the Energy Information Administration.
Much of the wiggle room created by weaker demand, increased production outside the Middle East and crude reserve inventory drawdowns "has now been used up," the International Monetary Fund said Wednesday in a social media post.
As tensions once again escalated along the Strait of Hormuz, which usually accounts for one fourth of global maritime oil trade, the IMF noted that its closure has prevented 20 million barrels of oil per day from reaching the market.