Oil surges strongly; Brent jumps 5% amid escalating geopolitical tensions

Arabic - Oil prices rose by about $4 per barrel in early trading on Wednesday, driven by escalating tensions in the Middle East and a decline in U.S. crude oil inventories, thereby offsetting part of the losses from the previous session, which had resulted from a halt in fighting between Washington and Tehran.

Giovanni Staunovo, an analyst at UBS, said, “The resumption of military strikes in the Middle East, along with Iranian officials’ reaffirmation of their desire to control navigation through the Strait of Hormuz amid declining oil flows through the strait, are pushing oil prices higher again.”

Market sources, citing data from the American Petroleum Institute, said U.S. crude oil inventories fell by about 3.3 million barrels in the week ending July 24, while gasoline inventories rose by 918,000 barrels, and distillate product inventories increased by 355,000 barrels compared with the previous week.

Sources told Reuters that the OPEC+ alliance is likely to halt oil production increases for three months starting in October, after it completely eliminated a voluntary cut segment it had previously imposed to support prices.