Oil Prices Rise Amid Middle East Tensions and U.S. Inventory Drop

Oil prices climbed early Thursday as U.S. fuel inventories declined and geopolitical tensions escalated. Brent crude futures rose 0.57% to $71.18 per barrel, while U.S. West Texas Intermediate (WTI) gained 0.51% to $67.50.

The price increase followed U.S. government data showing a larger-than-expected drop in distillate inventories, including diesel and heating oil, which fell by 2.8 million barrels—far exceeding the anticipated 300,000-barrel decline. However, U.S. crude stockpiles surged by 1.7 million barrels, surpassing forecasts of a 512,000-barrel rise.

Geopolitical risks also fueled market concerns. Israel launched a fresh ground operation in Gaza, breaking a nearly two-month ceasefire, while the U.S. continued airstrikes on Houthi targets in Yemen following the group's Red Sea attacks. Former U.S. President Donald Trump vowed to hold Iran accountable for future Houthi aggression.

Meanwhile, Ukrainian President Volodymyr Zelenskiy hinted at potential progress toward a ceasefire with Russia, which could ease sanctions and reintroduce Russian oil supplies to global markets. Talks between Russian and U.S. officials are set to resume in Saudi Arabia on Sunday, according to Trump’s Middle East envoy Steve Witkoff.

In the Americas, Chevron's CEO has requested the U.S. government to extend its deadline for winding down operations in Venezuela by 60 days beyond the original April 1 cutoff. Venezuela’s state-owned oil company, PDVSA, is reportedly planning to continue oil exports from its joint venture with Chevron.

With energy markets reacting to these global developments, investors remain focused on supply risks and potential shifts in geopolitical strategies that could impact oil prices further.