By Adedapo Adesanya
The major crude oil grades maintained their northward movement on Wednesday over worries that the escalating conflict in the Middle East could threaten oil supplies.
Brent futures rose by 34 cents or 0.46 per cent to settle at $73.90 per barrel and the US West Texas Intermediate (WTI) crude climbed by 27 cents or 0.39 per cent to $70.10 per barrel.
On Tuesday, Iran fired more than 180 missiles at Israel, its biggest ever direct attack on the country.
Meanwhile, Israel and the US vowed retribution for the attack, a sign that conflict in the region is intensifying.
Since the late Tuesday attack, Israeli ground troops have clashed with Hezbollah in southern Lebanon, with Israeli Prime Minister Benjamin Netanyahu vowing revenge and sparking fears of a full-blown war.
There are reports that Israel’s retaliation could include targeting Iranian oil production facilities among other strategic sites.
On Wednesday, Iran said its missile attack on Israel was over, barring further provocation. It added that any Israeli response to its attack would be met with widespread destruction.
Iran accounts for about 4 per cent of global oil output, and this could create trouble because Saudi Arabia may step in to cover the production losses.
Market analysts say that an attack on Iran’s oil infrastructure could provoke it to respond with a strike on Saudi oil facilities, similar to one conducted in 2019 on crude processing facilities there.
Meanwhile, a meeting on Wednesday of the top ministers of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ kept oil output policy unchanged.
The group is set to raise output by 180,000 barrels per day each month from December.
Meanwhile, the US Energy Information Administration (EIA/ reported an estimated inventory build of 3.9 million barrels for the week to September 27, driven by the latest escalation in the Middle East.
The inventory change compared with a draw of 4.5 million barrels for the previous week, which also saw declines in fuel inventories.
It also compared with the American Petroleum Institute (API)’s estimate, which pegged crude oil inventory change for the final week of September at a negative 1.5 million barrels.