Oil prices jump as US-Iran tensions rattle markets

Oil prices climbed sharply on Wednesday as fresh military developments involving the United States, Iran and Saudi Arabia raised fears of further escalation in the Middle East.

Oil prices climbed sharply on Wednesday as fresh military developments involving the United States, Iran and Saudi Arabia raised fears of further escalation in the Middle East.

Brent crude futures rose $3.30, or 3.9%, to $87.39 a barrel. US West Texas Intermediate (WTI) crude also gained $3.05, or 3.8%, to $82.31 a barrel.

The latest increase came after the United States and Saudi Arabia carried out strikes against Iran-backed groups in Iraq. The developments followed Iran’s reported missile attack targeting US forces in the region.

The renewed tensions have increased concerns about oil supplies from the Middle East. Investors are now watching closely for signs that the conflict could spread further across the Gulf.

US officials said American forces intercepted ballistic missiles launched by Iran towards US military positions in the Middle East. Washington described the incident as an attempted surprise attack.

Iran’s Islamic Revolutionary Guard Corps later said it had launched several ballistic missiles at a US air base and the US Central Command facility in Jordan.

Saudi Arabia also confirmed that its forces had conducted targeted strikes against Iran-backed groups in Iraq. Riyadh said the strikes were carried out jointly with the US Central Command.

Saudi authorities linked the operation to drone attacks targeting energy facilities in the kingdom. The developments have added to concerns over the security of critical oil infrastructure in the region.

Market analysts said the latest escalation has reduced expectations of a quick easing of tensions in the Persian Gulf. Any disruption to oil production or transportation routes could put additional upward pressure on crude prices.

US oil inventories have also provided support to the market. Crude stocks fell by around 3.3 million barrels during the week ending July 24, according to data cited from the American Petroleum Institute.

Official inventory figures from the US Energy Information Administration are expected later on Wednesday. Traders will closely examine the data for further signs of changes in demand and supply.

Meanwhile, OPEC+ could provide another boost to oil prices. Sources said the producer group is likely to pause planned increases in oil output for three months starting in October.

The possible pause would come after OPEC+ completes its scheduled return of barrels that had previously been removed from the market through voluntary production cuts.

For now, traders remain focused on developments between Washington and Tehran. Any further military escalation could increase concerns over regional oil supplies and push crude prices higher.