Oil prices rose by nearly 1% at the start of trading on Wednesday, September 2, extending the sharp gains made in the previous session.
Markets reacted to mounting concerns about supply disruptions after the United States and Iran exchanged strikes overnight, reducing hopes for a swift easing of tensions in the Middle East.
As highlighted by Reuters
Brent crude futures rose 87 cents, or 0.92%, to $95.52 a barrel as of 00:08 GMT. U.S. West Texas Intermediate (WTI) crude climbed 80 cents, or 0.89%, to $91.02 a barrel.
Both contracts had gained more than $4 the previous day. For Brent, it was the largest daily increase since July 24, while for WTI it was the biggest since July 23.
The United States said it had carried out a series of airstrikes on targets in Iran overnight. Iran responded with attacks, marking the most serious escalation between the two countries in recent weeks.
U.S. Central Command said the American strikes were carried out after the Islamic Revolutionary Guard Corps attempted to attack commercial shipping in the Strait of Hormuz, as well as U.S. service members deployed in the region.
The Islamic Revolutionary Guard Corps warned that U.S. actions would further restrict traffic through the Strait of Hormuz. Before the conflict began, the strategic waterway carried approximately one-fifth of the oil consumed worldwide. Iran has effectively closed the strait to commercial shipping.
Iranian officials also said they had launched a ballistic missile strike on a U.S. military base in Jordan and claimed that a significant number of American service members had been killed in the attack. Iranian state media separately reported a large-scale drone attack on a U.S. base in Bahrain.
Jordanian military officials said their air defenses had intercepted 10 of the 13 ballistic missiles that entered the country’s airspace. Two U.S. officials said that, at that time, there had been no reports of American citizens killed or wounded. Kuwait, meanwhile, said its armed forces had responded to hostile drone activity.
The latest attack extended a flare-up in hostilities that began over the weekend and was the first since July. Further market concern was triggered by strikes on two tankers leaving the Strait of Hormuz on Monday. As a result, oil supplies faced new disruptions, and traders began looking for alternative routes and sources of crude.
Prices were also supported by developments in the U.S. market. In the week ended August 28, U.S. crude oil inventories fell by 2.6 million barrels. Distillate stocks, which include diesel fuel and heating oil, declined by 265,000 barrels. Market participants cited data from the American Petroleum Institute.
Further price movements will depend on the scale of the new attacks, the safety of shipping in the Strait of Hormuz, and any potential disruptions to global supplies
