Overview
On Wednesday, global crude markets rallied sharply after Iran launched a second wave of ballistic missiles aimed at U.S. forces in the Middle East. The attack, which U.S. Central Command said was fully intercepted, revived concerns that the recent diplomatic pause could unravel and disrupt regional oil supplies.
Price Movement
Brent crude futures rose 4.2% to $87.62 a barrel, while West Texas Intermediate (WTI) futures gained 4.1% to $82.49 a barrel. Both benchmarks had previously retreated roughly 15% over the prior three sessions, falling from an intraday peak near $93.50 on Friday.
Geopolitical Trigger
The missile launch followed a period of relative calm after Israeli Prime Minister Benjamin Netanyahu met U.S. President Donald Trump in Washington. Trump later indicated a “good chance” that talks with Iran could make progress, although Tehran denied seeking negotiations or a ceasefire. ANZ analysts noted that Iran also rejected an Omani proposal intended to create a shared framework for managing traffic through the Strait of Hormuz, leaving tanker movements through the waterway subdued. Saudi Arabia reported intercepting drones and missiles targeting oil facilities in its Eastern Province, underscoring ongoing threats to regional energy infrastructure.
Inventory Data
The American Petroleum Institute (API) estimated that U.S. crude inventories fell by about 3.3 million barrels in the week ending Wednesday, signalling resilient demand ahead of the official government data release later in the day. This draw contributed to the tightening of global supply expectations.
OPEC+ Production Outlook
Reports indicated that OPEC+ is contemplating a three‑month pause to the planned output increases slated to begin in October, after completing the scheduled return of voluntary output cuts. A pause would further support prices by limiting additional supply growth.
Recent Market Context
The price rebound follows a sharp three‑day sell‑off that saw WTI retreat roughly 15% from its Friday peak near $93.50 as traders unwound bullish positions amid hopes that diplomatic efforts could ease U.S.–Iran tensions. The combination of renewed geopolitical risk, a significant U.S. inventory draw, and the prospect of an OPEC+ production pause collectively underpinned the more than 4% rally in crude oil prices.