Oil prices extended their rally for a third consecutive session on Wednesday after U.S. President Donald Trump threatened further military action against Iran, adding to supply concerns as shipping disruptions in the Strait of Hormuz intensified. Global benchmark Brent crude climbed toward $86 a barrel, while West Texas Intermediate traded above $80, building on an 11% surge over the previous two sessions.
The latest gains came after Trump warned that the U.S. would continue striking Iranian targets and could target power plants and bridges as early as next week unless Tehran agreed to return to negotiations.
The renewed escalation followed Washington's decision to resume its blockade of Iranian shipping through the Strait of Hormuz, one of the world's most critical energy chokepoints. The move came shortly after fresh U.S. strikes aimed at weakening Iran's ability to target commercial vessels transiting the waterway.
However, Trump also softened one part of his strategy, abandoning plans announced a day earlier to impose a 20% levy on cargo moving through the Strait of Hormuz. The reversal offered some relief to global shipping companies already grappling with rising security risks in the region.
ALSO READ: Trump Says Will Replace 20% Hormuz Cargo Fee With 'Trade Deals'
Even so, traders remain focused on the broader implications for oil supplies. Roughly 20% of the world's crude oil and liquefied natural gas passes through the Strait of Hormuz, making any disruption to traffic a key driver of global energy prices.
The latest military escalation follows attacks on oil tankers and Gulf infrastructure that have slowed shipping activity and revived fears of supply disruptions from the Middle East. Oil prices have now recovered a significant portion of the sharp losses recorded during the second quarter.
The conflict also widened after Yemen's Iran-backed Houthi group launched ballistic missiles and drones toward Saudi Arabia, marking the first major escalation between the two sides since their 2022 ceasefire.
Supporting crude prices further, industry data showed U.S. crude inventories fell by 600,000 barrels last week. If confirmed by official government data later on Wednesday, it would mark the 11th inventory decline in the past 12 weeks, pointing to continued strength in oil demand.
ALSO READ: India Ramps Up Maritime Response After Attacks On Shipping Vessels In Hormuz
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