Crude oil extended its rally on Wednesday, climbing more than 2% to approach $91 a barrel as traders reacted to escalating tensions in the Middle East. President Trump vowed to strike Iran “very hard” and asserted that Tehran had taken too long to negotiate a deal and would now “have to pay the price.”
His remarks came after Iranian attacks on several Gulf nations, including Bahrain, Jordan, and Kuwait, following US “self-defense strikes” carried out in response to the downing of an American helicopter. Traffic through the Strait of Hormuz remains heavily disrupted, with Iran blocking most shipping through the critical chokepoint, while the US has implemented its own restrictions on Iranian ports.
Even so, US Energy Secretary Wright stated that vessel traffic in the Gulf and oil exports through the Strait are increasing despite the ongoing disruptions. On the supply side, EIA data showed that US crude inventories fell by 7.228 million barrels last week, marking a seventh consecutive weekly decline and exceeding expectations of a 4 million barrel draw.