Oil Nears $97 as Middle East Conflict Deepens and Supply Risks Escalate

Oil prices advanced for a third consecutive session on Wednesday as escalating tensions in the Middle East heightened concerns over potential supply disruptions, pushing Brent crude oil closer to the $97 per barrel mark while U.S. West Texas Intermediate (WTI) approached $95.

Brent crude oil, the international benchmark for Nigerian crude oil, traded at approximately $96.81 per barrel, while WTI rose to around $94.67 as traders continued to assess the impact of renewed hostilities in the Gulf region and the breakdown of diplomatic efforts between the United States and Iran.

Market sentiment remained firmly supported by fears that the conflict could threaten crude supplies from one of the world’s most important oil-producing regions.

Investors are particularly focused on developments surrounding the Strait of Hormuz, a critical shipping route that handles a significant portion of global crude exports. Continued disruptions to maritime activity in the area have intensified concerns over energy security and supply availability.

The latest gains come as negotiations aimed at easing tensions between Washington and Tehran remain stalled. The absence of diplomatic progress has increased uncertainty in the oil market, leading traders to price in a higher geopolitical risk premium.

Supporting the bullish outlook, industry data showed U.S. crude inventories continued to decline, signaling a tightening supply environment ahead of the peak summer travel season.

Analysts noted that shrinking stockpiles, combined with elevated geopolitical risks, have reinforced expectations of a tighter global oil market in the coming months.

The International Energy Agency has also warned that global petroleum inventories remain relatively low, leaving the market more vulnerable to supply shocks at a time when seasonal demand is expected to increase.

Attention is now turning to upcoming U.S. inventory data and developments in the Middle East for further direction. Any signs of additional supply disruptions or a prolonged diplomatic impasse could provide further support for crude prices, while improvements in regional stability may ease some of the upward pressure.

For now, oil traders remain cautious as geopolitical uncertainty and tightening supplies continue to underpin the market, keeping Brent crude within reach of the psychologically important $100-per-barrel threshold.