Crude oil prices edged higher on Wednesday as rising tensions in the Middle East and the prospect of fresh sanctions on Russia raised fears of supply disruptions.
Brent crude climbed 0.7% to $66.85 per barrel, while US benchmark West Texas Intermediate (WTI) also rose 0.7% to $62.95.
The latest surge followed Israeli airstrikes on senior Hamas leaders in Doha, which Qatar denounced as “treacherous” and “state terrorism.”
Qatar, working with Egypt and the US, has been mediating a Gaza cease-fire after Israel’s war killed more than 64,000 Palestinians since October 2023. Such instability in a key energy region has amplified investor concerns over oil supply reliability.
Russia’s Escalation and Sanction Risks
Geopolitical jitters deepened as Russia launched its largest aerial assault on Ukraine since the start of the war, igniting a government building in Kyiv.
In response, US President Donald Trump signaled readiness to implement a tougher round of sanctions, while the European Union’s sanctions envoy held talks in Washington to align measures.
Market analysts warned that tighter restrictions on Russian crude could constrict global supply further and bolster prices.
US-India Trade Frictions Add Pressure
Adding to the uncertainty, trade tensions between Washington and New Delhi remain unresolved. The US recently imposed tariffs of up to 50% on Indian imports, retaliating against India’s continued purchases of Russian oil, with negotiations still ongoing to ease barriers.
Demand Concerns Temper Gains
Despite geopolitical drivers, weaker demand signals kept traders cautious. The American Petroleum Institute reported a crude stock build of 1.25 million barrels for the week ending September 5, exceeding expectations of a 622,000-barrel increase.
Analysts noted that while stock builds point to sluggish consumption, escalating conflicts and sanctions risks are likely to remain the dominant force supporting oil prices in the near term.
