Oil prices rebounded sharply on Wednesday after a bruising three-day selloff, as renewed military action in the Middle East revived concerns over disruptions to global crude supplies.
Global benchmark Brent crude rose more than 3% toward $87 a barrel, recovering part of the nearly 16% decline recorded over the previous three sessions. West Texas Intermediate (WTI) also climbed, trading near $83 a barrel, as traders reassessed geopolitical risks.
The latest gains came after the US military said it intercepted an attempted surprise attack by Iran on American troops in the Middle East, adding to concerns that the conflict could intensify after hopes of a diplomatic breakthrough had weighed on oil prices earlier this week.
Adding to market jitters, Iran-backed militias in Iraq launched drone attacks on oil facilities in Saudi Arabia's Eastern Region for a second consecutive day. Saudi authorities said the attacks were intercepted, although they did not disclose whether any energy infrastructure was damaged. Iran denied involvement, according to state media.
Oil prices have remained highly volatile throughout the month. Crude initially surged as fighting between the US and Iran intensified and the conflict spilled into the Red Sea, before retreating sharply as investors bet diplomacy could reduce supply risks. The latest flare-up, however, has again raised doubts over whether negotiations can deliver a lasting ceasefire.
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The Strait of Hormuz also remains a key focus for energy markets. Iran reportedly rejected an Omani proposal to jointly oversee shipping routes through the strategic waterway, insisting that inbound traffic should remain entirely under Tehran's control. Around one-fifth of the world's seaborne oil trade typically passes through the narrow passage, making any disruption a significant risk for global energy markets.
Meanwhile, diplomatic efforts continued in Washington, where US President Donald Trump met Israeli Prime Minister Benjamin Netanyahu. While both sides indicated a preference for negotiations over renewed military escalation, investors remained cautious as hostilities persisted.
Supporting oil prices further, industry data from the American Petroleum Institute (API) showed US crude inventories fell by 3.3 million barrels last week, including a drawdown at the key storage hub in Cushing, Oklahoma. Traders now await official inventory data later in the day for confirmation.
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