Global oil prices climbed sharply on Wednesday after renewed military tensions between the United States and Iran heightened concerns over energy supplies. A larger-than-expected decline in U.S. crude inventories also supported the market's gains.
According to Reuters, benchmark Brent crude rose $3.15, or 3.8%, to $87.24 per barrel by 11:20 a.m. Bangladesh time. Meanwhile, West Texas Intermediate (WTI) crude gained $2.73, or 3.4%, to $81.99 per barrel.
The increase follows Tuesday's decline, when Brent crude briefly fell below $85 per barrel, its lowest level since July 20.
Market analysts said renewed geopolitical uncertainty has weakened hopes for a near-term easing of tensions in the Middle East. ING analysts noted that reports of an attempted attack on U.S. forces contributed to renewed concerns over regional stability and global oil supplies.
Meanwhile, U.S. and Saudi forces reportedly carried out joint strikes against Iran-backed armed groups in Iraq following a drone attack targeting Saudi energy infrastructure.
Iran has also rejected Oman's proposal for a joint management framework for the Strait of Hormuz, one of the world's most important energy shipping routes. Before the current conflict, roughly one-fifth of global crude oil and liquefied natural gas shipments passed through the strategic waterway.
Analysts expect continued price volatility as geopolitical risks remain elevated. DBS Bank's head of energy research, Suvro Sarkar, said Brent crude is likely to trade between $80 and $100 per barrel in the near term if instability persists.
Separately, the American Petroleum Institute reported that U.S. crude oil inventories fell by 3.3 million barrels during the week ending July 24, adding further upward pressure on prices.
