Oil Market Update

Oil prices edged slightly higher on Wednesday as the market took a breather after the previous session’s strong gains driven by a resurgence in U.S.–Iran military strikes. Brent crude futures for November added 0.6% to settle at $95.25 a barrel, while U.S. West Texas Intermediate (WTI) futures for October rose 0.5% to $90.63 a barrel. Both contracts had surged over 4% and 5% respectively in the prior session, reaching their highest levels in about five weeks.

Geopolitical Developments

U.S. Central Command reported a new wave of attacks against Iran’s Islamic Revolutionary Guard Corps, targeting air‑defence sites, radar and communications installations. Iranian state media said the strikes killed 18 people and injured 108, also reporting damage to a factory in Qeshm, non‑military sites in Hormozgan, and a wedding ceremony in Sirik. Iran retaliated by striking Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. The Iranian foreign ministry condemned the U.S. actions as “terrorist and sabotage” attacks and labeled them “war crimes.”

President Donald Trump posted on Truth Social, “Now that we have it under U.S.A. control, should we change the name Hormuz Strait to TRUMP STRAIT???” and later told reporters the U.S. had “taken out all of the new equipment that they tried to build along the Strait of Hormuz” and was prepared to strike again at any time.

Supply‑Chain Concerns

The renewed confrontation raised fears of further restrictions on tanker movements through the Strait of Hormuz, potentially deepening an existing supply shock. Two super‑tankers carrying Saudi crude were hit by unidentified projectiles while transiting the strait on Monday; each vessel had loaded roughly 2 million barrels at Saudi Arabia’s Juaymah terminal. ING analysts noted that while oil has continued to flow, rising tensions increase the risk of crossing disruptions.

U.S. Energy Secretary Chris Wright stated that 17 million barrels of oil flowed through the strait on Monday, though analysts cited ship‑tracking data suggesting lower volumes and recommended using longer‑term averages for a more reliable measure.

Market Outlook

ING analysts added that, given disruptions to Middle‑East and Russian diesel exports and the absence of an imminent recovery, middle‑distillate cracks are likely to stay highly elevated and volatile as seasonal demand strengthens.

Iranian crude exports have been sharply curtailed, with Reuters reporting loadings falling to 220,000‑255,000 barrels per day in August, down from about 2 million bpd in March.

U.S. Inventories

U.S. commercial crude oil inventories (excluding the Strategic Petroleum Reserve) declined by 4.4 million barrels in the week of August 28, reaching 424.5 million barrels, versus market expectations of a 1.1 million‑barrel draw. Including the SPR, total inventories fell by 7.5 million barrels to 711.1 million barrels, the lowest level since November 1983.