Oil prices rebounded sharply on Wednesday, recovering part of the previous session’s steep losses, as renewed tensions in the Middle East reignited concerns over global crude supplies. A larger-than-expected drawdown in US crude inventories and speculation that OPEC+ could delay planned production increases also supported prices.
Brent crude rose 4.41% to $87.80 a barrel, gaining $3.71, while US West Texas Intermediate (WTI) climbed 4.23%, or $3.35, to $82.61 a barrel.
The recovery followed Tuesday’s nearly 5% decline, when prices fell to a two-week low amid optimism that a pause in hostilities between Washington and Tehran could create space for renewed diplomatic engagement. That optimism faded as security concerns in the region resurfaced.
Strait of Hormuz back in focus
Fresh concerns centred on the Strait of Hormuz, one of the world’s most important oil shipping routes. Any prolonged disruption to traffic through the waterway could tighten global crude supplies, raise shipping and fuel costs, and add to inflationary pressures across major economies.
Military developments further heightened market anxiety.
Saudi Arabia said it had joined the US Central Command (CENTCOM) in carrying out airstrikes against Iran-backed militant targets in Iraq following recent drone attacks on Saudi oil facilities. The Saudi defence ministry said the kingdom was not seeking escalation but would respond to threats against its security and critical infrastructure.
CENTCOM said the joint operation targeted multiple Iran-aligned logistics and weapons sites in eastern Iraq on July 28 after more than 30 IRGC-directed drone attacks had been launched over the previous 72 hours against US forces and Saudi energy infrastructure.
US inventory draw supports prices
Oil prices also found support from signs of tightening US crude supplies.
According to market sources citing data from the American Petroleum Institute (API), US crude inventories fell by around 3.3 million barrels in the week ended July 24.
Gasoline inventories, however, increased by 918,000 barrels, while distillate stocks rose by 355,000 barrels. Investors are now awaiting official inventory figures from the Energy Information Administration (EIA) later on Wednesday.
Shipping firms remain on alert
The renewed tensions have prompted shipping companies operating in the Gulf to remain on high alert. Several operators have adjusted sailing routes, strengthened onboard security measures and reviewed insurance coverage amid fears of further attacks on commercial vessels.
OPEC+ outlook adds further support
Market sentiment was also buoyed by expectations that OPEC+ could postpone its planned production increases for three months beginning in October after completing the scheduled return of barrels following voluntary output cuts.
Crude markets have remained highly volatile amid the ongoing US-Israeli conflict with Iran, which has disrupted global oil flows, particularly following the effective closure of the Strait of Hormuz.
US President Donald Trump, who halted a planned two-week US bombing campaign over the weekend, told Fox News on Tuesday that there had been “good talks” with Iran. However, he warned that further military strikes remained possible if negotiations failed. Iran, meanwhile, denied that it was seeking to resume talks with the United States.
