Oil prices traded little changed on Wednesday as investors largely shrugged off the latest military exchange between the United States and Iran, while a significant decline in U.S. crude inventories provided additional support to the market.
As of 05:47 ET (09:47 GMT), Brent crude futures for August delivery were broadly unchanged at $91.40 per barrel, while U.S. West Texas Intermediate crude traded at $88.19 per barrel. Both benchmarks had moved higher during Asian trading hours following renewed tensions in the Middle East.
The stability came after oil prices fell around 3% in the previous session, reaching their lowest levels in seven weeks.
Middle East Developments Remain in Focus
Iran announced on Wednesday that it had launched attacks against U.S. military facilities in Jordan and several Gulf countries in response to recent American strikes.
The U.S. operation was carried out after an American Apache helicopter was brought down in an incident that Washington attributed to an Iranian drone attack. Tehran has not accepted responsibility for the helicopter incident.
At the same time, Israeli military operations continued in southern Lebanon against Hezbollah forces backed by Iran.
The latest military actions raised concerns that recent progress toward easing tensions could be at risk. Earlier this week, Iran and Israel had agreed to suspend attacks following diplomatic appeals from President Donald Trump.
Nevertheless, analysts suggested that markets have so far reacted calmly to the latest developments.
“markets don’t consider the exchange of fire between Washington and Tehran over the last [roughly] 48 hours to be a significant event, as evidenced by the very muted reaction in oil,” analysts at Vital Knowledge said.
The analysts also highlighted comments from a White House official cited by Politico, who described the recent escalation as a “bump in the road toward peace.”
Strait of Hormuz Remains a Key Concern
Investors continue to monitor the possibility of a broader agreement between the United States and Iran that could eventually bring the conflict to an end and reopen the Strait of Hormuz.
The strategic waterway, which handles roughly one-fifth of global oil shipments, has been effectively closed for several months, creating persistent concerns over supply availability.
The resulting supply constraints have kept crude prices significantly above levels seen before the conflict, contributing to fears that higher energy costs could fuel inflation and influence central bank policy decisions around the world.
Market participants are now awaiting the latest U.S. consumer price index report for additional clues on how rising energy prices may be affecting broader inflation trends.
U.S. Crude Inventories Fall More Than Expected
Supporting prices, industry data pointed to a substantial decline in U.S. crude stockpiles last week.
The American Petroleum Institute reported that crude inventories fell by 9.12 million barrels, significantly exceeding expectations for a drawdown of 3.4 million barrels.
Gasoline inventories decreased by 1.19 million barrels, while distillate fuel stocks increased by 1.32 million barrels.
Investors are now awaiting official inventory figures from the U.S. Energy Information Administration later in the day to confirm the industry data.
More about the Oil Market
Global oil prices are currently being influenced by a combination of geopolitical risks, supply disruptions and expectations for economic growth. Developments in the Middle East, particularly around the Strait of Hormuz, remain a major driver of market sentiment, while inventory trends and inflation data continue to shape expectations for future demand and monetary policy.