Oil Prices Jump as Trump Vows Response to Iran Attack, Supply Risks Return

Oil prices rebounded sharply on Wednesday after the United States said it intercepted a surprise Iranian missile attack and President Donald Trump pledged a forceful response, reigniting concerns over potential supply disruptions in the Middle East. The rally also gained support from signs of tightening U.S. crude inventories and speculation that OPEC+ could delay additional production increases.

Brent crude futures for October climbed 7.5% to $87.84 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 6.5% to $87.82. The recovery followed a steep three-day selloff that had erased roughly 15% from both benchmarks.

The geopolitical tensions intensified after U.S. Central Command (CENTCOM) said Iran’s Islamic Revolutionary Guard Corps (IRGC) attempted a surprise missile strike on U.S. forces stationed in the Middle East. According to CENTCOM, all incoming missiles were intercepted. Trump later stated that the U.S. military had only minutes to respond and warned that Washington would retaliate by “hitting them hard.”

Separately, U.S. and Saudi forces carried out precision strikes against Iran-backed groups in Iraq that were allegedly preparing attacks on U.S. troops and Saudi energy infrastructure. Tehran denied involvement and criticized the accusations.

The renewed conflict dampened earlier optimism that diplomatic efforts between Washington and Tehran could ease regional tensions following Israeli Prime Minister Benjamin Netanyahu’s meeting with Trump. While Trump expressed hope for future talks, Iran denied seeking negotiations or a ceasefire.

Traders also remained focused on the security of key oil shipping routes. Maritime intelligence firm Kpler reported increased vessel traffic through the Strait of Hormuz and the Bab el-Mandeb Strait but cautioned that elevated transit levels do not indicate reduced geopolitical risk. The firm highlighted ongoing concerns surrounding shadow fleet operations, sanctioned vessels, and maritime security incidents.

Oil prices also found support after reports suggested OPEC+ is considering a three-month pause in planned production increases beginning in October. Meanwhile, the U.S. Energy Information Administration reported a larger-than-expected draw of 7.2 million barrels in commercial crude inventories for the week ended July 24, compared with expectations for a 0.7 million-barrel build. Strategic Petroleum Reserve holdings fell to 307.7 million barrels, their lowest level since March 1983, while inventories at the Cushing, Oklahoma delivery hub also declined, reinforcing expectations of a tighter oil market.