• Oil prices move higher as geopolitical tensions remain elevated.
• Iraq-Turkey export deal helps ease immediate supply disruption fears.
• Rising US Crude inventories point to softer demand conditions.

West Texas Intermediate (WTI) US Oil trades around $97.50 at the time of writing on Wednesday, up 2.37% on the day, supported by persistent geopolitical risks despite some signs of easing supply concerns.

Energy markets continue to be driven by tensions in the Middle East. Recent US military strikes near the Strait of Hormuz and Israeli attacks targeting senior Iranian officials have heightened fears of major disruptions to global Oil flows. In addition, Iran has reportedly targeted Oil and Gas infrastructure in the United Arab Emirates (UAE) and Iraq, marking a significant escalation by directly hitting upstream production facilities.

In this context, Qatar has warned about risks to global energy security following strikes on Iran’s South Pars Gas field, highlighting the critical importance of such infrastructure for market stability.

However, some developments are helping to cap further gains. Iraq has reached an agreement to resume Oil exports through Turkey’s Ceyhan port, effectively bypassing some of the risks associated with the Strait of Hormuz. Meanwhile, Iran has allowed safe passage for certain vessels based on their affiliations, temporarily reducing concerns over maritime supply disruptions.

Deutsche Bank analysts note that Brent Crude remains above $100 while daily volatility has narrowed, suggesting that markets are beginning to price in alternative supply routes. The bank highlights that the Iraq-Turkey deal has contributed to a degree of market calm, even as geopolitical risks remain elevated.

On the fundamental side, US inventory data is weighing on sentiment. The American Petroleum Institute (API) reported a 6.6 million-barrel increase in crude stocks, contrary to expectations of a draw. Official data from the Energy Information Administration (EIA) confirmed a similar trend, with inventories rising by 6.16 million barrels, marking the fourth consecutive weekly build.

Finally, the United States is stepping up efforts to secure key shipping routes, seeking to reopen the Strait of Hormuz, although allies have so far declined to participate. At the same time, the US administration has issued a temporary waiver of the Jones Act to facilitate the transport of energy products and help contain rising prices.

Overall, the Oil market remains caught between bullish geopolitical risks and short-term signs of oversupply, keeping WTI on an upward but volatile trajectory.