Oil prices extend gains as US and Iran trade fresh strikes

Business Recorder reported that oil prices extended their climb early on Wednesday, as the US and Iran traded strikes overnight and dimmed hopes of a quick easing in the Middle East. Brent climbed $1.03, or 1.1%, reaching $95.68 per barrel by 0605 GMT, while West Texas Intermediate added 0.7% to $90.83. Both benchmarks had surged by more than $4 on Tuesday.

Washington said it carried out a series of airstrikes on targets inside Iran, and Tehran responded, marking the sharpest escalation in weeks. The Revolutionary Guards contended that the American strikes would tighten passage through the Strait of Hormuz, a route Iran has effectively shut to commercial vessels. Jordan reported its air defence downed 10 of 13 ballistic missiles entering its airspace, while two American officials said no US personnel had been hurt up to that point.

ING analysts said rising tensions put Strait crossings at risk. Priyanka Sachdeva of Phillip Nova said the market now prices in the continuing burden of an unfinished conflict, and crude's risk premium is likely to stay high until talks yield a durable settlement. Weekly data showed US crude stocks shrank by 2.6 million barrels for the seven days to August 28, while middle distillates such as diesel and heating oil fell by 265,000 barrels, according to market sources citing the American Petroleum Institute.