Global oil prices rose by more than one percent on Wednesday following renewed sanctions on Iranian oil exports by the United States and a sharper-than-expected decline in U.S. crude inventories.
The twin developments reignited supply concerns across the energy market and supported a fresh uptick in benchmark crude futures.
Brent crude increased by $1.10 or 1.63 percent to settle at $68.54 per barrel while West Texas Intermediate gained $1.12 or 1.76 percent to close at $64.79.
Both contracts posted their highest levels since early April and signaled a potential shift in market sentiment after weeks of subdued movement.
The U.S. Treasury Department imposed new sanctions targeting an Iranian shipping network accused of transporting substantial volumes of crude oil and liquefied petroleum gas.
The move is part of Washington’s strategy to curb Iran’s oil revenues and tighten compliance with international restrictions.
Traders responded to the news as a sign of further tightening in global supply, especially as geopolitical risks in the Middle East remain elevated.
Market volatility is expected to increase if more restrictions affect Iran’s crude export routes or deter buyers in Asia and Europe.
Supporting the price rally, data from the American Petroleum Institute showed a 4.6 million barrel draw in U.S. crude inventories for the week ending April 19.
The figure surpassed analysts’ expectations of a 800,000 barrel decline and pointed to steady demand despite economic headwinds.
Gasoline and distillate stocks also declined by 2.2 million and 1.6 million barrels, respectively.
The inventory data reinforced expectations of tighter balances in the second quarter, especially with refiners ramping up output ahead of the summer travel season.
Recent statements by President Donald Trump and Treasury Secretary Scott Bessent suggested a softer stance on trade disputes and a reaffirmation of monetary stability which helped ease pressure on broader financial markets.
Traders now await official data from the U.S. Energy Information Administration for confirmation of inventory trends.
The EIA report is expected to provide further insight into production levels, stock movements and refinery utilization rates.
Oil analysts maintain that sustained supply cuts from OPEC and heightened geopolitical risks could support prices above current levels if demand remains resilient.
However, concerns persist around global economic growth following the IMF’s recent downgrade of world output forecasts.
With prices now rebounding and inventory draws accelerating, the market will closely monitor policy developments in the U.S. and Iran as well as China’s crude demand outlook for the remainder of the quarter.
