Crude oil prices edged lower as investors weighed the uncertainty surrounding renewed military strikes between the United States and Iran and the potential disruption to crude supplies from the Middle East.
Brent crude futures fell by 59 cents or 0.62 per cent to $95.04 a barrel, while US West Texas Intermediate (WTI) crude futures declined by 38 cents or 0.42 per cent to $90.63 a barrel.
The latest exchange of fire marked the most substantial military confrontation between the US and Iran since July, with the conflict now in its seventh month.
Brent and WTI had fluctuated sharply during the previous trading session, moving between gains of about $2 a barrel and losses of $1. The session highs for both benchmarks reached their highest levels since July 24.
However, oil prices retreated on tentative signs that the latest escalation could be easing, with no confirmed exchange of fire reported on Wednesday.
US President Donald Trump said on Wednesday that the renewed US military campaign against Iran would not continue for “too long”, while confirming that American forces had targeted Iranian radar and missile systems.
President Trump said US forces had destroyed newly built equipment around the Strait of Hormuz, describing the operation as a “very heavy attack” and warning that the US was prepared to launch another strike.
Four commodity vessels transited the Strait of Hormuz, below the 10-day average of around 13, preliminary shipping data from Kpler showed on Wednesday.
However, the US has claimed on Tuesday that 17 million barrels of oil transited the Strait of Hormuz on Monday, calling it the largest volume of crude to pass through the waterway since the US-Israeli war on Iran began
Iran also added more ships to the list of vessels it deems non-compliant and subject to fines, confiscation or detention if they try to sail through the strait.
Iraq increased its oil exports to around 2.34 million barrels per day in August from about 1.35 million barrels per day in July. The oil producer expects September exports to increase as heavy discounts and Iranian approvals for Iraqi tankers to pass through the Strait of Hormuz encouraged buyers.
Crude oil inventories in the US saw a decrease of 4.5 million barrels during the week ending August 28, according to data from the U.S. Energy Information Administration (EIA) released on Wednesday.
The increase brings commercial stockpiles to 424.5 million barrels, according to government data, which are now 1 per cent above the five-year average for this time of year.
The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which reported that crude oil inventories had fallen by 2.6 million barrels in the period.
The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is likely to leave its oil production policy unchanged for October when seven of its core members meet on Sunday.
Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan and Oman are due to meet online on Sunday, September 6. The seven producers have spent much of 2026 raising their monthly production quotas, with the September increase completing the phased rollback of 1.65 million barrels per day of supply cuts first agreed in 2023.
However, much of that additional supply has failed to reach the market. Actual production has lagged the higher quotas as the Iran war disrupted Gulf exports through the Strait of Hormuz, while the war in Ukraine has hit exports from Russia and Kazakhstan.
COURTESY: businesspost.ng
