DTN Oil Update
Oil Jumps as Fresh Hostilities Shake Mideast
SECAUCUS, N.J. (DTN) -- Oil prices surged Wednesday as renewed U.S- Iran hostilities led to worries the Middle East conflict was flaring again, scuttling hopes for peace and normalization of energy shipments through the Strait of Hormuz.
The U.S. Energy Information Administration's reporting of a 7.2-million-barrel (bbl) drop in domestic crude inventories that followed the prior week's 8-million-bbl deficit also bolstered crude futures on the New York Mercantile Exchange and ICE trading platforms.
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Separately, the U.S. Department of Energy (DOE) on Wednesday offered a further 40 million bbl from the Strategic Petroleum Reserve as part of its final deal with the International Energy Agency to provide a total of 172 million bbl as relief for supply disruptions caused by the Iran war.
NYMEX WTI crude for July delivery rose $1.83 to settle at $90.03 bbl, after a session high at $91.84. ICE Brent for August climbed $1.65 to settle at $93.10 bbl after peaking at $ 94.65.
Downstream, on NYMEX, July ULSD advanced by $0.0708 to settle at $ 3.6126, while July RBOB added $0.0888 to close at $3.1099 gallon.
On the forex market, the U.S. Dollar Index remained just beneath the key 100-point level, rising 0.091 point to 99.98 against a basket of foreign currencies.
Trading in energy futures intensified as the Trump administration ordered retaliatory strikes on Iranian targets after Tehran downed a U.S. military helicopter over the Strait of Hormuz. The critical transit corridor has been restricted at both ends by separate U.S.-Iran actions, keeping roughly 20 million barrels per day (bpd) of petroleum liquids offline.
Tehran responded by targeting U.S. bases in Jordan and several Gulf states, escalating concerns over prolonged regional shipping disruptions. The fresh hostilities erased the prior session's 3% decline, which had been driven by temporary optimism over a potential diplomatic resolution to the four-month conflict.
Further upward pressure came as President Donald Trump expressed impatience with the pace of peace talks on social media. The administration noted that Iran has taken too long to negotiate an end to the war and "will have to pay the price," while asserting that joint operations have severely diminished Iran's military capacity. Reports circulated that Washington was considering additional strikes against Iranian infrastructure, including power plants and bridges.
The renewed threat to infrastructure amplified supply concerns on a day when the macroeconomic outlook was already in focus. U.S. headline inflation accelerated for a third consecutive month to an annual pace of 4.2% in May, driven primarily by surging energy costs linked to the war, according to Consumer Price Index readings that showed its highest levels since April 2023.