Oil prices climbed nearly 2% on Wednesday, lifted by geopolitical tensions from Israel’s strike in Qatar, Poland’s downing of Russian drones, and fresh U.S. pressure for sanctions on Russian oil buyers, though a bearish U.S. inventory report capped gains.
Brent crude settled at $67.49, up $1.10 (1.7%), while U.S. West Texas Intermediate (WTI) closed at $63.67, up $1.04 (1.7%). Both benchmarks had risen 0.6% in the prior session after the initial report of Israel’s attack in Doha.
Poland’s downing of drones during a Russian barrage into western Ukraine marked the first time a NATO member engaged in the conflict, further stoking risk sentiment. Meanwhile, U.S. President Trump urged the EU to impose 100% tariffs on China and India, major buyers of Russian crude, as part of a broader strategy to pressure Moscow. EU leaders in Washington signaled they were weighing a faster phase-out of Russian fossil fuels but pushed back on sweeping tariffs.
Despite the geopolitical premium, fundamentals leaned bearish. The EIA reported a crude inventory build of 3.9 million barrels for the week ending Sept. 5, versus expectations for a 1 million barrel draw. Gasoline stocks rose 1.5 million barrels and distillates surged 4.7 million barrels, well above forecasts. “A very bearish report … it looks like gasoline demand will fall off a cliff after the summer driving season,” said John Kilduff of Again Capital.
The EIA also cautioned this week that rising inventories, coupled with planned OPEC+ output increases, could put “significant pressure” on crude prices in the coming months. Analysts at SEB noted that while geopolitical spikes grab headlines, “the dark cloud of surplus” continues to weigh on sentiment.
With the Federal Reserve expected to cut rates at its September 16–17 meeting, traders are balancing demand-side support from easier policy against the reality of swelling supplies.