Oil prices surged over $1 on Wednesday as escalating U.S.-Israeli military actions against Iran disrupted Middle East output and halted regional exports. Brent crude climbed 1.4% to $82.53 a barrel, while U.S. West Texas Intermediate crude rose 1.1% to $75.37.
Israeli and U.S. forces conducted strikes across Iran, prompting retaliatory attacks on energy infrastructure in a region vital to global oil production. Iraq, a major OPEC producer, has significantly reduced output by nearly 1.5 million barrels a day due to storage constraints and a lack of export routes, with potential for further shutdowns if exports don't resume.
Iran's actions have also targeted tankers in the Strait of Hormuz, a critical chokepoint for global energy transit. While U.S. President Donald Trump suggested potential naval escorts for oil tankers, industry experts question the immediate impact on restoring confidence. Several nations and companies are actively seeking alternative energy sources and routes.
Amidst these global supply concerns, U.S. crude inventories saw a significant increase of 5.6 million barrels last week, according to preliminary data.