DTN Oil Update
Brent Tops $100 bbl as U.S., Iran Target Ships Near Strait of Hormuz
SECAUCUS, N.J. (DTN) -- Crude oil futures rallied 3% or more Wednesday, with Brent breaching $100 bbl for the first time in seven weeks, as Tehran said it had targeted ships near the Strait of Hormuz, expanding the U.S. strategy of striking at commercial Iranian vessels in the sharply escalating Middle East war.
NYMEX WTI crude for October delivery rose $3.02, or 3.25%, to settle at $96.05 bbl, after hitting a more than three-month high at $96.82.
ICE Brent for November delivery moved up $4.21, or 4.34%, to settle at $101.21 bbl after running up to $101.58 bbl, its highest since a mid-July peak of $102.00.
Downstream, NYMEX ULSD for October delivery climbed $0.2332, or 5.10%, to finish at $4.8010 gallon. RBOB for October retreated $0.0419, or 1.29%, to end the session at $3.2106 gallon.
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By 3:31 p.m. EDT, the U.S. Dollar Index gained 2.8 points to 98.810 against a basket of currencies.
The rally in crude futures came as the Energy Information Administration (EIA) raised its Brent and WTI forecasts for 2026 in its Short-Term Energy Outlook (STEO), citing supply constraints.
The EIA expects the spot price of global crude benchmark Brent to average $91 bbl in 2026, up from the $86.67 bbl it projected for August. WTI is forecast to average $84.65 bbl in 2026, up significantly from the $65.40 bbl average recorded for 2025.
Supply tightness stems from ongoing transit bottlenecks in the Strait of Hormuz, where maritime threats have severely restricted Persian Gulf crude exports and forced regional producers to shut upstream production as storage fills.
Iranian forces said Wednesday they had fired upon 10 vessels, including U.S. warships, that had breached a restricted zone declared by its authorities. Tehran said it also launched a retaliatory ballistic missile barrage directed at a U.S. military installation located in eastern Jordan.
The U.S. Central Command denied the Iranian claim that U.S. warships were struck.
Washington shifted its strategy in the Middle East conflict into outright economic warfare in recent days by striking at Iranian oil tankers to impose direct economic costs on Tehran. U.S. forces commander Admiral Brad Cooper stated the military will continue targeting Iran's commercial fleet whenever Tehran's forces threaten U.S. Navy vessels.
The offensive comes on top of retaliatory Iranian ballistic missile strikes on U.S. bases in Jordan and threats of a total shipping exclusion zone. Meanwhile, Houthi attacks on Saudi refineries on Tuesday further constricted globally limited processing capacity, keeping supply fears elevated across energy markets.
Persian Gulf crude flows remain severely constrained, with transit through the Strait of Hormuz operating at roughly 40% of pre-war levels via U.S.-protected naval corridors and rerouted pipelines. However, significant demand destruction across major import markets continues to cap broader upside gains, as six months of elevated energy prices heavily weigh on global economic growth.
China's Sinopec projected domestic fuel consumption to drop steeply this year, forecasting annual demand declines of over 8% for gasoline and 11% for diesel.
Market participants are also focused on the Energy Information Administration's holiday-delayed inventory report, now due on Thursday at 11:00 a.m. EDT, to assess domestic product supplied figures and refinery throughput rates. The American Petroleum Institute will issue a preliminary reading of U.S. petroleum stockpiles at 4:30 p.m. EDT on Wednesday.