US-Iran war: Oil prices climbed more than 3% on Wednesday, 29 July, recovering a portion of the previous session’s losses after the United States and Iran paused hostilities. The rebound was also supported by a decline in US crude oil inventories.
Brent crude futures advanced $2.71, or 3.2%, to $86.80 a barrel after dropping over 14% in last three session, while US West Texas Intermediate (WTI) crude gained $2.26, or 3.4%, to trade at $81.95 per barrel.
What’s driving the crude oil prices?
In Washington, President Donald Trump held talks with Israeli Prime Minister Benjamin Netanyahu as the US administration worked to prevent a fresh round of military strikes on Iran.
Israel, which joined the US in launching military operations earlier this year, indicated that it supports diplomatic engagement. Following the meeting, an Israeli spokesperson said all sides preferred reaching a negotiated agreement—the “easy way”—rather than resorting to military action, or the “hard way,” to prevent Iran from acquiring nuclear weapons.
Oil prices have remained volatile throughout the month, climbing sharply after renewed hostilities between the US and Iran and the expansion of the conflict into the Red Sea, before retreating as geopolitical tensions eased. Investors continue to monitor crude oil shipments closely, with traffic through the Strait of Hormuz still facing disruptions.
Meanwhile, security concerns persist in the region. Saudi Arabia’s Defense Ministry said its air defense systems intercepted drones targeting oil facilities in the country’s Eastern Region. According to the ministry, the drones were launched by Iran-backed militias operating from Iraqi territory.
On the diplomatic front, Iran rejected Oman’s proposal for a navigation arrangement through the Strait of Hormuz, which suggested equal control between Tehran and Muscat. Deputy Foreign Minister Kazem Gharibabadi said the proposal failed to address Iran’s concerns, insisting that the inbound shipping route should remain fully under Iranian control, along with a portion of the outbound route.
(With inputs from agencies)
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
