Key Takeaways

• Oil bounces back: Brent rose 1.8% to $93.08 per barrel, while WTI climbed 1.8% to $89.78 — recovering from the prior session’s 3% slump to seven-week lows.
• Helicopter shoot-down triggers strikes: The U.S. launched strikes on Iranian targets near Hormuz after Iran downed a U.S. Apache helicopter.
• “Proportional” response: Trump described the U.S. retaliation as proportional; Tehran warned of further action.
• Ceasefire unravels: The latest escalation threatens the tentative pause in hostilities agreed earlier this week after Trump’s appeal.
• Diplomatic selloff reversed: Traders who had sold oil on peace hopes are now covering positions.
• Hormuz still critical: Roughly a fifth of the world’s oil and LNG flows through the strategic waterway.
• Energy Secretary’s mixed signals: Chris Wright said Gulf vessel traffic is improving but cautioned flows remain below normal and could take months to fully recover.
• API inventory shock: U.S. crude stockpiles fell 9.12 million barrels last week — nearly triple the 3.4 million expected.
• Gasoline stocks drop: Fell 1.19 million barrels.
• Distillates rise: Up 1.32 million barrels.
• EIA data due Wednesday: Official inventory figures will confirm whether the tightening trend is accelerating.

Oil prices rebounded during Asian trading on Wednesday, as fresh U.S. strikes on Iran over the downing of an American helicopter reignited supply concerns and cast doubt on a fragile ceasefire.

As of 20:28 ET (00:28 GMT), Brent oil futures expiring in August rose 1.8% to $93.08 a barrel, while U.S. West Texas Intermediate crude futures climbed 1.8% to $89.78 a barrel.

Both contracts had slipped roughly 3% in the previous session, with prices reaching their lowest levels in seven weeks.

U.S. Launches Strikes After Helicopter Downed

Washington launched strikes on Iranian targets near the Strait of Hormuz on Tuesday, following the downing of a U.S. Apache helicopter by what U.S. officials said was an Iranian drone attack.

President Donald Trump described the response as a “proportional” retaliation, while Tehran warned it would answer any further military action.

The latest escalation threatens to unravel tentative progress toward de-escalation after Iran and Israel agreed earlier this week to halt attacks following appeals from Trump.

Traders had previously interpreted the pause in hostilities as a sign that the conflict might be moving toward a diplomatic resolution — prompting a selloff in crude. Those hopes have now faded.

Hormuz Still Below Normal

Attention remains focused on the Strait of Hormuz — a critical artery for global energy supplies through which roughly a fifth of the world’s oil and liquefied natural gas flows.

Although U.S. Energy Secretary Chris Wright said vessel traffic and oil exports through the Gulf have been improving in recent weeks, he cautioned that energy flows remain below normal and could take months to fully recover.

API Inventory Shock Amplifies Supply Concerns

Further supporting prices, industry data showed U.S. crude inventories fell sharply last week.

The American Petroleum Institute reported a 9.12 million-barrel draw in crude stockpiles — much larger than the expected 3.4 million-barrel decline.

Gasoline inventories fell by 1.19 million barrels, while distillate stocks rose by 1.32 million barrels. The data reinforced concerns that global inventories could tighten further if Middle East tensions escalate.

Investors now await official U.S. government inventory data from the Energy Information Administration later on Wednesday for confirmation.