Oil Climbs on Ceasefire Uncertainty

Crude oil surged more than 6% to above $84 a barrel on Wednesday, snapping a three-day losing streak as renewed fighting across the Middle East reinforced concerns over potential supply disruptions. The US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East. Meanwhile, Iran-backed militias in Iraq launched drones at oil facilities in Saudi Arabia’s Eastern Region for a second consecutive day. Also, there were reports that Yemen's Houthi militants were considering charging fees for vessels transiting the Red Sea, adding to concerns over shipping costs and energy flows. Iran has also sought to impose similar charges on the Strait of Hormuz. In the US, API data showed crude oil inventories fell by 3.3 million barrels last week, pointing to continued tightness in global oil supplies.

Crude oil surged more than 4% toward $83 per barrel on Wednesday, snapping a three-day losing streak as renewed hostilities in the Middle East reignited geopolitical tensions after several days of relative calm, fueling fresh concerns over disruptions to energy supplies. The US military said it had successfully intercepted what it described as a surprise Iranian attack targeting US troops stationed across the Middle East. Meanwhile, Iran-backed militias in Iraq launched drones at oil facilities in Saudi Arabia’s Eastern Region for a second consecutive day, although the full extent of the damage remains unclear. On the diplomatic front, Iran rejected Oman’s proposal for shared 50-50 control of the Strait of Hormuz, maintaining that Tehran must retain full control of the inbound shipping lane and part of the outbound route. In the US, API data showed crude oil inventories fell by 3.3 million barrels last week, pointing to continued tightness in global oil supplies.

Crude oil fell to around $79 per barrel on Tuesday, touching its lowest level in more than a week, as renewed diplomatic efforts over the Strait of Hormuz improved the outlook for Middle East oil supplies. Iran’s Foreign Minister Abbas Araghchi held separate talks with his Saudi and Omani counterparts, focusing on restoring security in the strategic waterway after disruptions caused by the US-Iran conflict. Oman has proposed a joint regional mechanism to manage the strait, allowing Iran to collect voluntary transit fees, a plan that has reportedly gained support from Gulf states. Also, President Donald Trump said Washington was holding “good talks” with Tehran, although he warned military strikes could resume if diplomacy fails, while Iran also threatened retaliation. Despite the diplomatic progress, regional risks remain elevated after Saudi Arabia intercepted drones targeting oil facilities and Yemen’s Houthi rebels claimed an attack on the kingdom’s East-West pipeline.