Oil surged nearly 8% as renewed Middle East strikes and inventory plunge snap sell-off

Global crude benchmarks rebounded sharply on Wednesday, surging nearly 8% to snap a three-day slide as a swift resumption of US airstrikes in the Middle East shattered ceasefire hopes and a dramatic draw in US inventories exposed tight global physical supply.

International Brent crude leaped $6.65 (7.91%) to settle at $90.74 a barrel, reclaiming the $90 threshold.

US West Texas Intermediate (WTI) jumped $5.20 (6.56%) to finish at $84.46 a barrel.

Downward momentum evaporated after Washington and Riyadh launched joint strikes against Iran-backed targets in Iraq following drone attacks on Saudi energy infrastructure. Geopolitical risk premiums escalated further as Tehran officially rejected an Omani proposal for shared transit management of the Strait of Hormuz, prompting the US Treasury to slap fresh sanctions on 10 Iranian entities and eight tankers.

Sustained bullish momentum was locked in by tightening US fundamentals and producer supply discipline. Data from the Energy Information Administration (EIA) revealed a massive 7.2-million-barrel drop in domestic crude stockpiles to 404.5 million barrels—its lowest level since 2018. Prices received additional structural support following reports that OPEC+ plans to pause scheduled output increases for three months starting in October.

Written by: Aiman Haikal