HOUSTON: Global oil prices jumped more than 3% on Wednesday after a sharp decline in U.S. fuel inventories and rising geopolitical tensions in the Middle East, including reports of attacks on ships in the Strait of Hormuz. Market uncertainty also increased due to stalled diplomatic efforts between the United States and Iran.
Brent crude futures rose by $3.17, or 3.22%, reaching $101.65 per barrel, while West Texas Intermediate (WTI) climbed $2.70, or 3.01%, to $91.37 per barrel. The surge followed data from the U.S. Energy Information Administration showing a surprise draw in gasoline and distillate stocks.
According to the EIA report, U.S. crude inventories increased by 1.9 million barrels to 465.7 million barrels. However, gasoline stocks fell sharply by 4.6 million barrels to 228.4 million barrels, exceeding analyst expectations of a smaller decline. Distillate inventories also dropped by 3.4 million barrels, signaling tighter fuel supply conditions.
Adding to market pressure, reports emerged that at least three container ships were struck by gunfire in the Strait of Hormuz, a critical chokepoint for global oil and liquefied natural gas shipments. Iranian naval forces also reportedly seized two vessels for alleged maritime violations, escalating regional tensions and raising concerns over shipping security.
The Strait of Hormuz normally handles around 20% of global oil trade, making it one of the most important energy transit routes in the world. Any disruption in this corridor has immediate effects on global oil prices and energy markets.
Meanwhile, geopolitical uncertainty remains high as ceasefire discussions between Iran and the United States show limited progress. Former U.S. President Donald Trump announced an extension of the ceasefire, but reports suggest diplomatic talks remain stalled.
In parallel developments, Russia announced it will redirect some oil exports from Kazakhstan away from Germany-bound routes, while the European Union is considering emergency fuel stock measures to address potential supply risks.
Analysts say that a combination of tightening U.S. fuel inventories, Middle East maritime risks, and geopolitical instability continues to drive volatility in global oil markets.
