Oil surges 7% as escalating tensions fuel supply concerns

Oil prices surged around 7% on Wednesday after renewed military strikes in the Middle East intensified concerns over potential supply disruptions, while a sharp decline in US crude inventories added further support to the market.

 

Brent crude climbed 7.53% to $90.42 a barrel, while US West Texas Intermediate (WTI) crude rose 6.64% to $84.52 a barrel.

 

The rally followed fresh US and Saudi air strikes targeting Iran-backed groups in Iraq after drone attacks on Saudi oil facilities. The escalation came shortly after the US military said it had thwarted an attempted Iranian attack on American forces in the region.

 

Iran also reported attacks on vessels in the Strait of Hormuz and US military bases in Jordan. Separately, explosions struck a natural gas loading facility on Egypt's Mediterranean coast, while maritime security firm Ambrey reported that a US-owned floating storage tanker had been hit by a drone.

 

The renewed geopolitical tensions, coupled with US government data showing domestic crude inventories had fallen to a multi-year low, reinforced fears of tighter global oil supplies and pushed prices sharply higher.