Oil edged past $95 as Hormuz mine strikes and steep US inventory draw counter workaround flows

Global crude oil futures settled approximately 1% higher on Wednesday, consolidating near multi-week highs in a volatile session as escalating naval hostilities in the Persian Gulf and a sharp drawdown in US commercial stockpiles outweighed the dampening effect of alternative regional supply flows.

International benchmark Brent crude rose 98 cents, or 1.00%, to settle at $95.63 a barrel, having swung between intraday gains of $2 and losses of $1.

US West Texas Intermediate (WTI) climbed 79 cents, or 0.87%, to close at $91.01 a barrel.

Both contracts registered intraday peaks not seen since 24 July, extending the previous session's sharp rally.

Upstream bullish momentum was sustained as direct military clashes between Washington and Tehran reached their most intense level since July, marking the seventh month of regional conflict. US forces targeted Iranian coastal radar and mine-laying assets, prompting retaliatory Iranian strikes on American military positions across the Middle East. Physical logistics through the Strait of Hormuz deteriorated further after two oil tankers struck naval mines and were disabled, while Tehran expanded its registry of non-compliant vessels subject to fines and detention. Daily commodity vessel transits fell to four ships, remaining well below the 10-day average of 13 and reinforcing structural transit risk premiums.

Supply support was further reinforced by domestic inventory tightness in the US, where the Energy Information Administration confirmed commercial crude stocks plunged by 4.5 million barrels last week, far exceeding market expectations of a 1.1-million-barrel draw. Upstream tightness was compounded by Russian strikes against energy infrastructure in Ukraine's Odesa region and expectations that OPEC+ will maintain existing output quotas for October.

While gains were partially checked by expanding Iraqi workaround export shipments, persistent naval bottlenecks continue to underpin global energy valuations and sustain cost-push pressures across downstream petrochemical feedstock chains.

Written by: Aiman Haikal