Oil prices inched higher in early trading on Wednesday as fears of further supply disruptions intensified after U.S. forces said they began striking Iranian military targets for the 11th straight night and Kuwait reported attacks by Iranian drones.
Brent crude futures rose 0.55%, or 50 cents, to $91.51 after markets opened on Wednesday, while U.S. West Texas Intermediate crude climbed 0.36%, or 30 cents, to $84.64 in low-volume trading.
This comes after oil settled at a five-week high on Tuesday after U.S. forces struck targets in southern and western Iran, while Iran attacked U.S. facilities in Bahrain, Kuwait and Jordan.
The U.S. military said it began its latest strikes on Iran late on Tuesday in the United States, or early Wednesday in Iran. The U.S. attacks came a short while after the Kuwaiti army said its air defences were intercepting Iranian drones on Wednesday.
The constant trading of strikes has raised fears of further disruptions to global energy supplies after Yemen’s Iran-aligned Houthis opened a new front in the Iran war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb Strait and announcing a naval blockade of Saudi Arabia.
The Bab el-Mandeb waterway at the southern entrance to the Red Sea has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has fallen sharply since a ceasefire between the United States and Iran collapsed earlier this month.
Separately, Pete Hegseth, the U.S. defence secretary, said the country’s war in Iran has cost it $37.5 billion so far, an increase of nearly $8 billion since the last public estimate.
Data from the American Petroleum Institute showed that U.S. crude and distillate inventories rose last week, while gasoline stockpiles fell, market sources said. The inventory data comes ahead of official figures from the U.S. Energy Information Administration on Wednesday.
