Oil prices rose sharply on Wednesday as renewed airstrikes in the Middle East increased concern about regional supply disruptions and shipping risks.
Brent crude settled $6.65 higher at $90.74 a barrel, a gain of 7.91%. U.S. West Texas Intermediate crude increased $5.20, or 6.56%, to $84.46 a barrel.
The market reaction followed strikes by the United States and Saudi Arabia against Iran-backed groups in Iraq, as well as reports of attacks involving ships and energy infrastructure in the region.
The Strait of Hormuz remained a major focus because tanker traffic through the waterway was limited. The Bab el-Mandeb route also drew attention amid reports that Yemen’s Houthis were considering fees for commercial ships using the southern Red Sea.
U.S. crude inventories fell by 7.2 million barrels to 404.5 million barrels, their lowest level since 2018, according to the U.S. Energy Information Administration. Analysts had expected a much smaller decline.
Energy analysts expect prices to remain volatile while the conflict and shipping conditions change. A sustained rise would increase transport and production costs across many economies.
The next market signals will include tanker movements, any further military escalation, new sanctions and decisions by major oil producers on output levels.