Oil Prices Edge Up as US-Iran Tensions Raise Global Supply Concerns
Market Movements and Geopolitical Developments
Oil Price Changes Amid Escalating Tensions
July 22 (Reuters) - Oil prices inched higher in early trading on Wednesday as fears of further supply disruptions intensified after U.S. forces said it began striking Iranian military targets for the 11th straight night and Kuwait reported attacks by Iranian drones.
Brent crude futures rose 0.55%, or 50 cents, to $91.51 after markets opened on Wednesday, while U.S. West Texas Intermediate crude climbed 0.36%, or 30 cents, to $84.64 in low volume trading.
Recent Military Actions Impacting Oil Markets
This comes after oil settled at a five-week high on Tuesday after U.S. forces struck targets in southern and western Iran, while Iran attacked U.S. facilities in Bahrain, Kuwait and Jordan.
The U.S. military said it began its latest strikes on Iran late on Tuesday in the United States, or early Wednesday in Iran. The U.S. attacks came a short while after the Kuwaiti army said its air defences were intercepting Iranian drones on Wednesday.
Global Supply Concerns Intensify
Threats to Key Oil Shipping Routes
The constant trading of strikes have raised fears of further disruptions to global energy supplies after Yemen's Iran-aligned Houthis opened a new front in the Iran war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb Strait and announcing a naval blockade of Saudi Arabia.
Strategic Importance of Bab el-Mandeb Waterway
The Bab el-Mandeb waterway at the southern entrance to the Red Sea has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has fallen sharply since a ceasefire between the United States and Iran collapsed earlier this month.
Economic and Inventory Updates
Financial Costs of the Conflict
Separately, Pete Hegseth, the U.S. defense secretary said the country's war in Iran has cost it $37.5 billion so far, an increase of nearly $8 billion since the last public estimate.
US Oil Inventory Data
Data from the American Petroleum Institute showed that U.S. crude and distillate inventories rose last week, while gasoline stockpiles fell, market sources said. The inventory data comes ahead of official figures from the U.S. Energy Information Administration on Wednesday.
(Reporting by Siddharth Cavale in New York; Editing by Lincoln Feast.)