Oil prices climbed sharply on Wednesday, with Brent crude futures rising 3.18% to $93.90 a barrel and U.S. West Texas Intermediate advancing 3.44% to $87.24, as of 3:18 PM (Bangkok time). The rally followed ongoing military actions, as U.S. forces conducted their eleventh consecutive night of airstrikes against Iranian targets in response to tensions over the Strait of Hormuz.
U.S. Secretary of State Marco Rubio reinforced Washington’s preference for diplomatic solutions but criticized Iran’s approach to negotiations regarding the crucial waterway. Rubio accused Tehran of undermining existing agreements connected to the strait, stating that Iran is not serious about talks, and suggested that their demands to control the passage set a “dangerous precedent” for international trade.
The latest military campaign targeted Iranian military infrastructure, including operational centers, maritime assets, and drone facilities. According to U.S. Central Command, these strikes aimed to weaken Iran’s capacity to threaten commercial shipping in the area.
Market sentiment shifted as traders digested both the security developments and renewed uncertainty regarding the possibility of a truce between the U.S. and Iran. Analysts noted that hopes for a temporary ceasefire had faded, escalating supply concerns.
In parallel, investors increased bets that the Federal Reserve might tighten policy to counter inflation should energy prices continue to climb. Money markets reflected a 24.1% probability of a rate increase in July, with the odds of another hike by September at 69%, according to the CME’s FedWatch tool.
On Tuesday, three tankers loaded with Saudi crude reversed course in the Red Sea following threats from Yemen’s Houthi militia, a group supported by Iran. The Bab el-Mandeb Strait, now a chokepoint for vessels avoiding the Strait of Hormuz, is becoming increasingly crucial for Saudi crude exports.
Further compounding the situation, the Caspian Pipeline Consortium halted oil intake from Kazakhstan after suspending loadings at its Black Sea terminal because of recent attacks attributed to Ukrainian drones. Analysts suggested prolonged suspension could lead to production cutbacks in Kazakhstan.
Meanwhile, American Petroleum Institute data indicated a rise in U.S. crude and distillate inventories, while gasoline stocks declined ahead of official government figures expected later Wednesday. The combination of geopolitical risks and shifting inventory levels continued to underpin volatility in global oil markets.
