WTI steadies around $87.50 despite renewed supply concerns

West Texas Intermediate (WTI) oil price experiences volatility after registering over 2.5% losses in the previous day, trading around $87.40 per barrel during the Asian hours on Wednesday. Crude oil prices advanced in earlier hours as intensifying Middle East conflicts renewed severe supply anxieties.

Following a brief drop in prices on Tuesday when Israel and Iran temporarily suspended hostilities, the conflict quickly escalated again. According to reports, the US launched a third wave of retaliatory strikes on Iranian coastal targets on Wednesday after Iran fired at least three ballistic missiles from Isfahan. This followed an initial round of US strikes on Tuesday, which Washington called a proportional response to Iran downing a US helicopter gunship near the critical Strait of Hormuz.

Diplomatic efforts to secure a lasting peace have hit a standstill. Tehran warned it would resume full hostilities if Israel continues its military campaign against the Hezbollah militia in Lebanon. Israel's refusal to halt these attacks has severely hindered the Trump administration's efforts to transition a fragile, temporary ceasefire into a permanent settlement.

Meanwhile, physical supply tightness is compounding market anxieties. Industry data from the API revealed that US crude inventories plunged by 9.1 million barrels last week, hitting their lowest level in four months as buyers scrambled to replace supplies disrupted by the Persian Gulf turmoil. Despite the ongoing three-month-old war and struggling peace talks, the U.S. Energy Secretary noted on Tuesday that ship traffic and oil exports through the Strait of Hormuz are currently rising.