Oil prices settled higher on Wednesday in a volatile session as renewed military exchanges between the United States and Iran heightened concerns over further disruptions to global energy supplies. Brent crude rose 98 cents, or 1.0%, to settle at $95.63 per barrel, while WTI gained 79 cents, or 0.9%, to $91.01. Both benchmarks experienced significant intraday swings and reached their highest levels since late July.

The latest escalation marked the largest exchange of fire between Washington and Tehran since July, with U.S. forces striking targets along Iran’s southern coast and Iran retaliating against U.S. positions across the region. The renewed fighting has increased uncertainty surrounding physical oil flows through the Strait of Hormuz, where shipping traffic remains severely restricted.

Only four commodity vessels transited the strait on Wednesday, below the recent 10-day average of approximately 13. Iran also indicated that renewed U.S. attacks could further restrict maritime traffic, although alternative supply routes and workaround shipments have helped prevent a more severe supply shortfall.

Additional support came from a larger-than-expected draw in U.S. crude inventories. Commercial crude stocks fell by 4.5 million barrels last week, significantly exceeding expectations for a 1.1 million-barrel decline.

Meanwhile, OPEC+ is expected to maintain its current output policy for October, while ongoing attacks on energy infrastructure in Ukraine and Russia continue to add uncertainty to global energy markets.

With military tensions escalating, Hormuz traffic remaining constrained, and U.S. inventories declining sharply, oil markets continue to carry a substantial geopolitical risk premium despite the availability of alternative supply routes.