Brent Crude Nears $96 Amid US Strikes on Iran and Red Sea Shipping Threats
Brent crude climbed to a six-week high near $96 a barrel as consecutive US military strikes on Iran and escalating attacks on maritime chokepoints override bearish inventory data, signaling sustained volatility for global energy markets.
Brent crude rose 1.76 percent to $95.73 a barrel in early Asian trading, while West Texas Intermediate gained 1.41 percent to $88.05. The rally marks the highest levels for both benchmarks in over six weeks, driven by escalating military conflict in the Middle East.
The United States launched its 12th consecutive night of strikes against Iranian military targets. US Central Command stated the Wednesday operation, ordered by President Trump, aims to degrade Iran’s capacity to threaten commercial shipping and civilian mariners.
Tensions are severely impacting critical maritime chokepoints. Iran’s Revolutionary Guards claimed an oil tanker caught fire after navigating a mined route south of the Strait of Hormuz, while two other vessels turned back. Iranian officials subsequently declared the waterway under their control, mandating coordination with Tehran for any transit.
Concurrently, Iran-backed Houthis in Yemen have expanded their campaign against regional maritime traffic. The group announced a naval blockade of Saudi Arabia and claimed responsibility for striking two Saudi tankers in the Red Sea, including the Saudi-flagged Encelia. Iranian state media reported that at least nine ships have been forced to retreat from the Bab el-Mandeb Strait.
Geopolitical Risk Overrides Inventory Build
These overlapping threats to the Strait of Hormuz and the Bab el-Mandeb Strait have reignited fears of major supply disruptions. Global markets have already drawn down significant reserves, leaving the supply chain highly vulnerable to any prolonged closure of these vital shipping arteries.
This geopolitical premium is currently overpowering fundamental bearish signals. The US Energy Information Administration reported a surprise build of 2 million barrels in commercial crude inventories last week, defying analyst forecasts for a 1.1 million barrel draw.
The inventory increase was attributed to softer refinery activity, stronger imports, and lower crude exports. Under typical market conditions, such a build would exert downward pressure on prices.
However, the immediate risk of supply chain severance continues to dictate trader sentiment. Absent a rapid diplomatic breakthrough, market participants should anticipate sustained volatility and further upward pressure on global oil prices.
