Oil prices surged more than seven percent on Wednesday, with Brent crude returning to $90 a barrel, after a brief ceasefire in the Middle East collapsed amid renewed missile strikes between the United States and Iran-backed groups. The uptick marks a sharp reversal from earlier hopes of de-escalation, as fighting reignited supply fears in a region critical to global energy markets.
The rally was amplified by industry data showing a drawdown in US crude inventories, adding further upward pressure. The renewed hostilities have disrupted shipping through the Strait of Hormuz and the Bab el-Mandeb strait, key chokepoints for oil tankers. Analysts expect oil prices to remain volatile in the near term as the conflict continues, with no clear path to a lasting truce.
The brief ceasefire, which had offered a glimmer of stability, was shattered by fresh attacks, sending traders scrambling to price in renewed supply risks. The United States and Iran-backed groups are directly involved in the latest exchanges, though the full scope of the military action remains unclear. The Strait of Hormuz alone handles about a fifth of the world's oil consumption, making any disruption there a major concern for global markets.
Wednesday's jump adds to broader gains seen in recent weeks, as geopolitical tensions have kept investors on edge. The combination of armed conflict and tightening US inventories has created a volatile environment, with further spikes possible if fighting escalates or shipping routes face sustained blockade.