Middle East tensions and concerns about global oil glut drive up crude prices

From Yahoo Finance: 2025-06-18 15:19:00

Crude oil prices closed higher on Wednesday, with WTI crude up +0.40% and RBOB gasoline up +1.62%. The increase was driven by concerns about the Israel-Iran conflict and bullish EIA report findings. President Trump’s call for Iran’s “unconditional surrender” also contributed to the price rise.

President Trump’s meeting with his national security team raised speculation about potential US involvement in Israel’s attacks on Iran. Despite this, Iran has not disrupted ship movement through the Strait of Hormuz, although signals have been jammed, causing a collision between two tankers.

Tariff concerns from President Trump’s recent announcements are impacting oil prices. Nonetheless, a decrease in crude oil stored on tankers is positively affecting the market. Vortexa reported a 7.2% decline in oil stored on stationary tankers, signaling a bullish trend for oil prices.

OPEC+’s decision to increase crude production is negatively impacting oil prices due to concerns about a global oil glut. Saudi Arabia’s plans for further production increases are seen as a strategy to lower prices and discipline overproducing members. OPEC May crude production rose to 27.54 million bpd, adding to market concerns.

The EIA’s bullish report on Wednesday showed a significant draw in crude inventories and smaller builds in gasoline and distillate stockpiles. US crude oil inventories are currently 10.2% below the seasonal 5-year average, with gasoline and distillate inventories also below their respective averages.

Baker Hughes reported a decrease in active US oil rigs to a 3-3/4 year low of 439 rigs. This decline comes after a steady decrease in the number of oil rigs over the past 2-1/2 years. The reduction in active rigs reflects ongoing challenges in the US oil industry.



Read more at Yahoo Finance: Middle East Jitters Underpin Crude Prices