Crude oil rose 1% to $89 a barrel on Wednesday as traders reacted to escalating tensions in the Middle East. US President Donald Trump said Iran had taken too long to negotiate a deal and would now “have to pay the price.”
His comments followed reported Iranian attacks on several Gulf states, including Bahrain, Jordan, and Kuwait, launched after US “self-defence strikes” carried out in response to the downing of an American helicopter.
Traffic through the Strait of Hormuz remains heavily disrupted, with Iran blocking most shipping through the strategic waterway, while the US has imposed its own restrictions on Iranian ports. Even so, US Energy Secretary Chris Wright said vessel traffic in the Gulf and oil exports through the Strait are increasing despite the ongoing disruptions.
Meanwhile, data from the American Petroleum Institute (API) showed US crude inventories fell by 9.1 million barrels last week to their lowest level in four months, as buyers sought to replace supplies interrupted by tensions in the Persian Gulf.
