WTI crude oil futures surged more than 5% on Wednesday to climb above $105 per barrel, as markets saw no indication of an imminent resolution to the conflict with Iran or a reopening of the Strait of Hormuz. The sharp move higher reflects intensifying concerns over supply after the United Arab Emirates’ unexpected decision to exit OPEC, alongside growing signs that the confrontation involving Iran could be prolonged.
Additional upward pressure came from reports that Donald Trump is preparing to extend a blockade on Iranian ports, deepening fears of sustained disruptions to crude flows through the strategically vital Strait of Hormuz. Diplomatic efforts have stalled, with both sides firmly entrenched, reinforcing expectations that the standoff may continue for weeks.
At the same time, US inventory data showed steep draws in crude and refined product stockpiles, while exports jumped to record levels above 6 million barrels per day, highlighting a tightening global supply backdrop. Prices for gasoline and other refined fuels have also spiked, intensifying inflation worries worldwide as energy markets remain highly volatile and on edge.
