Crude Oil Surges as Hormuz Closure Persists While US Strategic Reserves Plunge to Four-Decade Low

Key Takeaways

• Brent crude reached $89.81 while WTI touched $84.08 on Wednesday, continuing a multi-day winning streak
• Maritime strikes in the Strait of Hormuz and Bab el-Mandeb are stoking concerns over global supply chains
• Tehran insists the Hormuz passage will remain blocked until Washington fulfills its demands, including unfreezing Iranian funds
• American crude stockpiles unexpectedly jumped by 9.1 million barrels, potentially moderating supply worries
• America’s Strategic Petroleum Reserve dropped beneath 300 million barrels, reaching its weakest point since 1982

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Oil prices advanced on Wednesday following renewed maritime incidents in two vital Middle Eastern shipping corridors, heightening market anxiety over potential supply constraints.

Brent crude futures gained 1% to reach $89.81 per barrel, marking a sixth consecutive session of increases. West Texas Intermediate climbed 1.1% to $84.08, extending its winning streak to five sessions.

The upward momentum followed reports from both Washington and Yemen’s Houthi movement detailing distinct maritime incidents in the Strait of Hormuz and Bab el-Mandeb Strait during Tuesday’s trading.

These two strategic passages serve as essential corridors for transporting petroleum and natural gas from the Middle East, working in tandem with the Suez Canal.

A senior Iranian security official declared that the Strait of Hormuz would remain inaccessible until Washington agrees to Tehran’s stipulations for ending hostilities, which encompass releasing frozen Iranian financial assets.

President Donald Trump has firmly rejected these requirements, and negotiations have yielded minimal advancement toward resolution.

Maritime tracking information revealed only eight vessels successfully navigated through Hormuz on Tuesday, representing a weekly minimum. Prior to the conflict, daily traffic ranged between 125 and 140 ships.

American Crude Inventories Unexpectedly Surge

Notwithstanding the price appreciation, expanding US crude reserves could constrain additional gains.

The American Petroleum Institute’s industry figures indicated US crude reserves increased by approximately 9.1 million barrels during the previous week, substantially exceeding market forecasts.

Gasoline reserves declined by 1.5 million barrels while distillate inventories contracted by 596,000 barrels during the identical timeframe.

Market observers noted the inventory accumulation might alleviate certain supply tightness apprehensions, pending verification from official Energy Information Administration statistics scheduled for release later Wednesday.

A Reuters survey had projected inventory declines, rendering the unexpected accumulation a significant development for market participants.

Emergency Petroleum Stockpile Reaches Four-Decade Minimum

America’s Strategic Petroleum Reserve declined below the 300 million barrel threshold during the previous week, decreasing 6.1 million barrels to 298.7 million barrels.

This represents the most depleted level in four decades, based on Department of Energy records.

President Trump authorized the withdrawal of 172 million barrels during March to mitigate supply interruptions stemming from the Iranian situation.

The strategic reserve was established for deployment during supply crises, and the ongoing depletion illustrates the severity of global petroleum supply pressures.

In Libya, the National Oil Corporation announced that blazes at petroleum storage facilities within the Zawiya oil installation were completely extinguished.

Looking ahead, the EIA anticipates Middle Eastern crude supply interruptions will continue through late 2027. The agency projects 2026 Brent prices will average $86.81 per barrel while West Texas Intermediate should average $80.88.

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Source: https://blockonomi.com/crude-oil-surges-as-hormuz-closure-persists-while-us-strategic-reserves-plunge-to-four-decade-low/