Oil prices ended Wednesday little changed after a volatile session, as intensifying U.S. and Israeli strikes on Iran and continued disruption in the Strait of Hormuz kept markets on edge.
Brent crude settled at $81.40 per barrel, unchanged from Tuesday and its highest close since January 2025. U.S. West Texas Intermediate rose 10 cents, or 0.1%, to settle at $74.66, marking its highest finish since June for a second straight session.
Earlier in the day, Brent climbed more than $3 to an intraday peak of $84.48 before paring gains after reports that Iranian intelligence officials had signaled openness to talks with U.S. counterparts about ending the conflict.
Despite the flat close, prices remain elevated as traders assess the risk of a prolonged war and continued supply disruption. The Strait of Hormuz — which handles roughly one-fifth of global oil flows — has been effectively shut for five days, severely constraining shipping. The region accounts for just under one-third of global oil production.
Iraq, OPEC’s second-largest producer, has cut nearly 1.5 million barrels per day due to storage constraints and blocked export routes. Officials warned output could be reduced by as much as 3 million bpd within days if exports do not resume.
U.S. President Donald Trump said the Navy could begin escorting oil tankers through the strait if needed and ordered political risk insurance and financial guarantees for Gulf maritime trade. The Pentagon and Energy Department are also drafting plans to secure tanker passage.
Meanwhile, some countries and refiners are seeking alternative supplies. India and Indonesia are looking for replacement cargoes, while certain Chinese refineries are shutting units or advancing maintenance schedules.
On the data front, U.S. crude inventories rose by 3.5 million barrels last week to their highest level in three-and-a-half years, exceeding expectations for a 2.3 million-barrel build. Gasoline stocks fell by 1.7 million barrels, while distillate inventories increased by 429,000 barrels.
Although global crude supply remains ample, including near-record volumes held in floating storage, traders expect continued volatility until energy shipments can move freely and geopolitical risk subsides.