Oil settled over 3% higher at six-week peak as dual-strait threats and mined Hormuz warnings ignite supply panic

Global crude benchmarks advanced over 3% on Wednesday to settle at six-week highs, driven by escalating US-Iran military exchanges and expanding maritime blockades across both the Strait of Hormuz and the Bab el-Mandeb corridors.

The international Brent contract rallied $3.06 (3.36%) to settle at $94.07 a barrel after touching an intraday peak of $95.47, while US WTI climbed $2.49 (2.95%) to close at $86.83.

Signalling severe near-term physical tightness, the Brent three-month time spread expanded to $9.26 a barrel, reaching its widest backwardation since late May.

Upward pricing momentum accelerated following an 11th consecutive night of US strikes on Iranian targets, compounded by warnings from Tehran’s Revolutionary Guards that the southern route of the Strait of Hormuz is actively mined. Logistics risks intensified sharply as Houthi naval blockade threats against Saudi-linked crude created a dual-strait crisis, forcing at least five Red Sea tankers to divert and prompting Asian refiners to arrange alternative shipments around Africa.

Gains were slightly constrained by bearish US inventory data. The US Energy Information Administration reported a surprise 2.0 million-barrel build in commercial crude stockpiles to 411.7 million barrels for the week ended July 17, contradicting industry forecasts of a 1.1 million-barrel draw.

Written by: Aiman Haikal