Oil prices rise slightly after US announces new round of strikes on Iran

Oil prices inched higher in early trading on Wednesday (July 22) as fears of further supply disruptions intensified after US forces said it began striking Iranian military targets for the 11th straight night and Kuwait reported attacks by Iranian drones.

Brent crude futures rose 0.55 per cent, or 50 cents, to US$91.51 (S$118) after markets opened on Wednesday, while US West Texas Intermediate crude climbed 0.36 per cent, or 30 cents, to $84.64 in low volume trading.

This comes after oil settled at a five-week high on Tuesday after US forces struck targets in southern and western Iran, while Iran attacked US facilities in Bahrain, Kuwait and Jordan.

The US military said it began its latest strikes on Iran late on Tuesday in the US, or early Wednesday in Iran. The US attacks came a short while after the Kuwaiti army said its air defences were intercepting Iranian drones on Wednesday.

The constant trading of strikes have raised fears of further disruptions to global energy supplies after Yemen's Iran-aligned Houthis opened a new front in the Iran war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb Strait and announcing a naval blockade of Saudi Arabia.

The Bab el-Mandeb waterway at the southern entrance to the Red Sea has become an increasingly important route for Saudi crude exports as traffic through the Strait of Hormuz has fallen sharply since a ceasefire between the United States and Iran collapsed earlier this month.

Separately, Pete Hegseth, the US defence secretary said the country's war in Iran has cost it US$37.5 billion so far, an increase of nearly US$8 billion since the last public estimate.

Data from the American Petroleum Institute showed that US crude and distillate inventories rose last week, while gasoline stockpiles fell, market sources said. The inventory data comes ahead of official figures from the US Energy Information Administration on Wednesday.

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