Oil prices advanced for a fourth consecutive session on Wednesday as escalating conflict between the United States and Iran, along with threats to Saudi-linked shipping, heightened concerns over global energy supplies.
Brent crude futures for September delivery rose ~0.91% to US$91.86 per barrel, while West Texas Intermediate crude gained ~0.81% to US$85.02 per barrel as of 20:43 ET. Both benchmarks traded near their highest levels since mid-June.
Crude Oil Futures (Source: TradingView)
The latest gains came as US forces continued strikes against Iranian military infrastructure for an 11th consecutive night. The operations reportedly targeted missile and drone launch sites, air-defence systems, command facilities and other strategic assets. Iran responded with further attacks on US military positions across the region, including locations in Bahrain, Kuwait and Jordan.
Supply concerns were also intensified by Yemen’s Iran-aligned Houthi movement, which threatened a naval blockade targeting Saudi-linked shipping in the Red Sea. The warning prompted some oil tankers to change their routes, raising fears of potential disruption to exports from Saudi Arabia, one of the world’s largest crude oil producers.
Meanwhile, maritime traffic near the Strait of Hormuz has already been affected by regional hostilities. As the waterway plays a critical role in global oil transportation, any prolonged disruption could restrict supply and increase shipping, freight and insurance costs.
However, US inventory data provided some counterbalance to the geopolitical risk premium. The American Petroleum Institute reported that crude inventories increased by 2.603 million barrels last week, compared with market expectations for a decline of 1.5 million barrels. This represented the first inventory build in two weeks. Investors will now closely monitor official stockpile data from the US Energy Information Administration.
For Australian investors, sustained strength in global oil prices may support sentiment towards ASX-listed energy producers and companies with upstream exposure. However, higher crude prices could also increase fuel and transportation costs, potentially placing additional pressure on airlines, logistics companies and other energy-intensive businesses.
Although geopolitical uncertainty remains the primary driver of the latest rally, oil markets are likely to remain volatile as investors assess supply disruption risks against global inventory trends.
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