Oil Prices Climb as US-Iran Strikes Escalate Middle East Tensions

Oil prices extended their gains on Wednesday, rising nearly 1% in early trading as fresh strikes between the United States and Iran intensified concerns over supply disruptions in the Middle East. Brent crude futures climbed 87 cents, or 0.92%, to $95.52 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 80 cents, or 0.89%, to $91.02. The move follows a surge of more than $4 per barrel in the previous session.

The escalation began with U.S. airstrikes against targets in Iran, which the U.S. Central Command said were in response to recent attacks by Iran's Islamic Revolutionary Guard Corps (IRGC) on commercial shipping in the Strait of Hormuz and on American service members in the region.

In retaliation, the IRGC said it had targeted a U.S. military base in Jordan with ballistic missiles and launched a large-scale drone attack on a U.S. base in Bahrain. Jordan's military reported intercepting 10 of 13 missiles, while U.S. officials said no American casualties had been reported. Kuwait also said its forces were responding to hostile drone activity.

The IRGC warned that the U.S. attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carried about one-fifth of global oil consumption before the conflict and which Iran has effectively closed to commercial shipping. The latest exchange follows attacks on two tankers departing the strait on Monday, forcing traders to seek alternative crude shipments.

In the U.S., crude inventories fell by 2.6 million barrels in the week ended August 28, while distillate stocks declined by 265,000 barrels, according to market sources citing data from the American Petroleum Institute.