Oil Prices Rise Amid Middle East Tensions and Falling US Crude Inventories

PUKMEDIA

Oil prices.

Oil prices extended their gains on Wednesday amid renewed tensions in the Middle East and continued uncertainty surrounding negotiations between the United States and Iran, while a sharp decline in US crude inventories provided additional support to the market.

Brent crude futures for August delivery rose by 1.5% to $97.46 per barrel, while US West Texas Intermediate (WTI) crude futures increased by 1.6% to $95.23 per barrel.

Both benchmarks had already gained more than 1% during the previous trading session.

Investor attention remained firmly focused on developments in the Middle East after hopes of progress in talks between Washington and Tehran appeared to fade.

Israel continued its military operations in southern Lebanon, while Kuwait announced that its air defence systems had intercepted missiles and drones launched from Iran. Meanwhile, US Central Command said American forces had carried out strikes on Iran’s Qeshm Island, located near the Strait of Hormuz — a strategic waterway through which around one-fifth of global oil supplies pass.

Reports suggest communication between the United States and Iran has stalled in recent days, despite US President Donald Trump maintaining that negotiations remain under way.

Iranian media have also expressed doubts about the likelihood of a near-term agreement, prompting traders to factor a higher geopolitical risk premium into oil prices.

A new round of talks between Israel and Lebanon is expected to take place on Wednesday.

Further support for prices came from data released by the American Petroleum Institute, which showed that US crude oil inventories fell by 6.8 million barrels in the week ending 29 May 2025, well above market expectations for a decline of 3.6 million barrels.

Markets are now awaiting official inventory figures from the US Energy Information Administration later on Wednesday.

Investors are also monitoring a series of key US economic indicators due later in the day, including the ADP employment report, the ISM services index, and factory orders data.

The figures come ahead of Friday’s closely watched non-farm payrolls report.


PUKMEDIA