Oil Prices Rally as Middle East Tensions Reignite

The sudden escalation followed a brief period of calm that had allowed the geopolitical risk premium to retreat after the U.S. halted its strikes on Iranian targets last Thursday. U.S. Central Command confirmed that Iranian forces launched multiple missiles, all of which were intercepted. In response, U.S. and Saudi forces conducted precision strikes against logistics and weapons sites in eastern Iraq. While these operations avoided Iranian soil, the renewed combat effectively ended the fragile pause in regional fighting.

Market pressure was compounded by American Petroleum Institute data showing a 3.3 million barrel draw in U.S. crude stockpiles last week. Simultaneously, the Strategic Petroleum Reserve released 3.7 million barrels, bringing reserves to their lowest level since March 1983. As traders await the Energy Information Administration’s official inventory report, the market remains highly sensitive to any further military signals from the region.