Oil prices jumped more than 5% on Wednesday as mutual military strikes between the United States and Iran intensified and Washington moved to choke off Iranian crude exports. Brent futures climbed $3.90 to $78.10 a barrel, while August WTI closed up 7.41%, extending a rally that began Tuesday.
The U.S. launched strikes against more than 80 targets in Iran after the Islamic Revolutionary Guard Corps targeted a third commercial vessel in the Strait of Hormuz, prompting the Joint Maritime Information Center to raise the strait's threat level to critical. Tehran threatened to close the waterway to all maritime traffic and warned that any site hosting U.S. forces would be considered a legitimate target. The German Foreign Ministry condemned the U.S. actions as a violation of the framework agreement. Meanwhile, the U.S. Treasury banned all new Iranian oil transactions effective July 7, and President Trump said Washington could resume a blockade of Iranian ports.
Supply-side data offered mixed signals. Saudi crude exports rose to 6.3 million barrels per day and OPEC+ plans to add 188,000 bpd in August, yet the IEA forecasts global oil consumption will decline by 1.1 million bpd this year. U.S. crude inventories rose 3.0 million barrels last week, even as active rig counts hit a 13-month high.