WASHINGTON (dpa-AFX) - Extending two days of gains, crude oil prices have soared on Wednesday as fresh military strikes in the Middle East renew war concerns while U.S. and Iran peace talks are still in limbo, thereby leaving the Strait of Hormuz blocked for oil and energy trade.
WTI Crude Oil for July month delivery was last seen trading up by $2.31 (or 2.46%) at $96.07 per barrel.
As the gulf war entered day number 96 today, expectations on a positive signal on a U.S.-Iran agreement diminished after reports of fresh military strikes in the Middle East.
The U.S. military stated that it carried out 'self-defense' attacks that targeted a communications tower serving for Islamic Revolutionary Guards Corps, south of Qeshm Island. In response, Iran carried out missile and drone attacks on U.S. military bases in Bahrain and Kuwait.
Kuwait stated that Iran's drone and missile strikes damaged a passenger terminal of its international airport, killing one and injuring more than 60 people. Denying this, Iran stated that it targeted Ali Al Salem Air Base.
Kuwait claimed to have engaged around 13 ballistic missiles and 17 drones within its airspace which it intercepted successfully. The U.S. and Bahraini forces combined to intercept missiles aimed at Bahrain.
According to recent reports from Iran's Tasnim and Fars, frustrated by Israeli attacks on Lebanon despite a mutually agreed ceasefire, the Iranian team involved in peace talks with the U.S. stopped the exchange of communications.
However, yesterday through a social media post, U.S. President Donald Trump rejected these reports and maintained that talks are continuing without any interruption.
Trump acknowledged that he was uncertain about the outcome though he urged Iran to make a deal with the U.S. soon.
Today, in an interview with the New York Post, Trump stated that Iran's Supreme Leader Ayatollah Mojtaba Khamenei is engaged in the ongoing negotiations to end the war and added that he is expecting to meet him but Trump asserted that he was not in a hurry to end the crisis.
Trump also acknowledged that the U.S. naval blockade on Iranian ports could continue until September though he felt that the crisis will resolve fairly quickly.
Yesterday, while testifying before Congress, U.S. Secretary of State Marco Rubio stated that since Iran has mined large portions of the Strait of Hormuz, the U.S. would not offer sanctions relief to Iran in return for opening the strait, and would want Iran to accept U.S. demands on its nuclear programs.
The prevailing lack of clarity on the timeframe to reopen the Strait of Hormuz is supporting crude oil prices on the upside.
Citing the rise in energy prices, ongoing geopolitical tensions, and increasing global inflation, in its quarterly update, the Organization for Economic Cooperation and Development downgraded its global growth outlook, down from its previous estimate of 2.90% to 2.80% for 2026.
On the inventory front, data from the American Petroleum Institute revealed that U.S. crude oil inventories fell by 6,800,000 barrels for the week ending May 29, sharply exceeding expectations for a 3,600,000-barrel decrease.
According to the U.S. Energy Information Administration, for the week ending May 29, crude oil inventories in the U.S. fell by 7,974,000 barrels. At the Cushing, Oklahoma delivery hub, inventories decreased by 583,000 barrels.
For the same period, gasoline inventories increased by 3,364,000 barrels, distillate inventories increased by 1,500,000 barrels, and heating oil inventories increased by 255,000 barrels.
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