Crude oil rose back above $89 per barrel on Wednesday, recovering part of the previous session’s sharp losses after the US carried out new strikes against Iran in response to the downing of an American helicopter. The escalation heightened doubts about the durability of a fragile ceasefire and clouded prospects for a longer-term peace agreement.
The US military said President Donald Trump ordered the “self-defense strikes” after an Apache helicopter was shot down. In turn, Iranian Foreign Minister Abbas Araghchi warned that Iran’s armed forces would respond to any attack or threat.
Oil prices had slumped as much as 5.9% on Tuesday after Israel and Iran agreed to suspend hostilities following a renewed flare-up in the conflict. Adding further support to prices, industry data from the American Petroleum Institute (API) showed that US crude inventories fell by 9.1 million barrels last week, to their lowest level in four months, as buyers moved to replace supplies disrupted by turmoil in the Persian Gulf.
