Crude oil reversed early gains to trade below $79 a barrel on Wednesday, as mounting tensions in the Middle East kept supply risks in focus. The pullback came after a new round of US strikes on Iran and the reimposition of a naval blockade targeting Iranian ports near the Strait of Hormuz.
US forces hit dozens of military assets along Iran’s coastline and near the strategic chokepoint in a seven-hour operation intended to weaken Tehran’s capacity to disrupt shipping through the strait. President Trump also vowed to escalate military operations until Iran stops attacking vessels in the area and agrees to fully reopen the waterway.
Separately, on Tuesday, Trump scrapped plans to levy a 20% fee on cargo transiting Hormuz, contending that any lost revenue would be more than offset by future investment from Gulf states in the United States.
On the data front, figures from the EIA showed that US crude inventories declined by 1.7 million barrels last week.
