US-Iran war: Oil prices edged higher in early trade on Wednesday, 22 July, as concerns over potential supply disruptions grew after US forces launched strikes on Iranian military targets for the 11th consecutive night, while Kuwait reported drone attacks allegedly carried out by Iran.
Brent crude futures gained 0.55%, or 50 cents, to trade at $91.51 a barrel, while US West Texas Intermediate (WTI) crude rose 0.36%, or 30 cents, to $84.64 a barrel in thin trading.
What’s driving crude oil prices today?
Oil prices ended Tuesday at their highest level in five weeks after the United States carried out strikes on targets in southern and western Iran, while Tehran responded by attacking US facilities in Bahrain, Kuwait, and Jordan.
The US military said the latest round of strikes began late Tuesday US time, corresponding to early Wednesday in Iran. The attacks came shortly after Kuwait’s military reported intercepting Iranian drones over its airspace.
The continued exchange of military strikes has intensified concerns over potential disruptions to global energy supplies. Adding to the worries, Yemen’s Iran-backed Houthi rebels threatened to target ships transporting Saudi crude through the Bab el-Mandeb Strait and announced a naval blockade of Saudi Arabia.
The Bab el-Mandeb Strait, located at the southern entrance to the Red Sea, has become a key export route for Saudi oil as shipments through the Strait of Hormuz have declined sharply following the collapse of the US-Iran ceasefire earlier this month.
Meanwhile, US Defense Secretary Pete Hegseth said the country’s military campaign in Iran has cost $37.5 billion so far, nearly $8 billion more than the previous public estimate.
On the supply front, data from the American Petroleum Institute (API) showed that US crude oil and distillate inventories increased last week, while gasoline stockpiles declined, according to market sources. Investors are now awaiting official inventory data from the US Energy Information Administration (EIA), scheduled for release on Wednesday.
(With inputs from agencies)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
