- Oil prices continued to climb in early Asian trade on Wednesday as the renewed hostilities between the United States and Iran showed no signs of slowing.
- At the time of writing, Brent crude was trading at $92.44, up 1.57% on the session, while WTI was changing hands at $85.51, up 1.39%.
- Both benchmarks are now at five-week highs and have been consistently climbing since hitting lows during the July 4th weekend.
- The latest move higher was driven by another night of U.S. military operations against Iranian targets, marking the 11th consecutive evening of strikes.
- According to CENTCOM, American forces targeted "Iranian military operations centers, maritime assets, aircraft hangars, drone storage facilities and logistics infrastructure" in an effort to degrade Iran's ability to threaten commercial shipping.
- As military exchanges continue across multiple fronts and shipping security deteriorates around both Hormuz and the Bab el-Mandeb, the upside risk for oil prices is only going to climb.
- The most recent U.S. attacks came after Kuwait intercepted Iranian drones in what was the latest in a spree of Iranian strikes against U.S. allies in the region.
- For oil markets, the next major escalation point will be in the Red Sea, where Yemen's Iran-backed Houthi movement has threatened to target vessels carrying Saudi crude through the Bab el-Mandeb Strait.
- In a worrying sign of the risk in the region, three Saudi oil tankers were attacked in the Red Sea on Tuesday after the Houthis declared a blockade on Saudi oil passing through the Bab el-Mandeb.
- As attacks continue, there is currently little sign of diplomatic progress, with President Trump signaling that military operations are likely to intensify and saying the United States currently has "no interest" in renewed negotiations.
Oil prices are on the rise as the U.S.-Iran conflict intensifies, with Brent crude hitting $92.44 and WTI at $85.51. This surge follows 11 consecutive nights of U.S. military strikes targeting Iranian military operations, which have raised concerns over global energy supply disruptions.12
According to CENTCOM, the U.S. has targeted Iranian military operations centers, maritime assets, and logistics infrastructure to degrade Iran's ability to threaten commercial shipping. Despite these efforts, Iran has reportedly attacked over 30 commercial vessels in the past three months, leading to heightened fears in the oil markets.5
The situation is further complicated by threats from Yemen's Iran-aligned Houthi movement, which has declared a blockade on Saudi oil passing through the Bab el-Mandeb Strait. This blockade has already impacted three Saudi oil tankers in the Red Sea, signaling a worrying escalation in regional tensions.689
As President Trump indicated that military operations are likely to intensify, the outlook for oil prices remains uncertain. The U.S. war in Iran has already cost approximately $37.5 billion, an increase of nearly $8 billion since the last estimate, highlighting the financial stakes involved in this ongoing conflict.
“Brent crude traded at $92.44 and West Texas Intermediate at $85.51 as U.S. forces struck Iranian targets for the 11th straight night. The escalation widened as Yemen's Iran-backed Houthis declared a blockade on Saudi oil through the Bab el-Mandeb Strait, and Kuwait intercepted Iranian drones.”
Crude Oil Prices Today | OilPrice.com
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