Crude oil futures climbed to a six-week high of $88.6 per barrel on Wednesday before retreating to $86.5, as markets weighed the potential impact of a Middle Eastern oil blockade on global supply. Ongoing strikes between the US and Iran continued to disrupt oil and fuel exports from the GCC.
US Secretary of State Rubio accused Iran of failing to uphold earlier commitments and stressed that any future deal must ensure freedom of navigation through the Strait of Hormuz, bar Iran from developing nuclear weapons, and curb its support for militant groups. At the same time, threats from Yemen’s Houthi rebels targeting shipping lanes in the Red Sea heightened concerns about further disruptions to international oil trade.
Additional pressure on global energy markets came from attacks on the Caspian Pipeline Consortium terminal in the Black Sea. However, EIA data showed an unexpected 1.4 million-barrel increase in US crude inventories last week, defying expectations of a drawdown.