FX.co ★ Brent Swings Amid Escalating Middle East Tensions

Brent crude hovered around $91 a barrel on Wednesday, after dropping about 3% in the previous session and giving back earlier gains from Asian trading, as traders weighed escalating tensions in the Middle East. Iran launched attacks on several Gulf countries, including Bahrain, Jordan, and Kuwait, following US “self-defence strikes” carried out in response to the downing of an American helicopter. Shipping through the Strait of Hormuz remains heavily disrupted, with Iran blocking most traffic through the strategic waterway, while the US has imposed its own restrictions on Iranian ports. Even so, US Energy Secretary Chris Wright said vessel traffic in the Gulf and crude exports through the Strait are increasing despite the ongoing disruptions. At the same time, API data showed that US crude inventories fell by 9.1 million barrels last week to their lowest level in four months, as buyers moved to replace supplies affected by the tensions in the Persian Gulf.