August WTI crude oil (CLQ26) closed Wednesday up $0.26, or 0.33%, while August RBOB gasoline (RBQ26) gained $0.0736, or 2.28%.
Crude and gasoline futures finished higher on Wednesday, with gasoline reaching a sharp seven-week high. Oil found support after the United States carried out a fifth day of airstrikes against Iran in response to Iranian attacks on shipping in the Strait of Hormuz, raising the risk that flows through the critical waterway could be disrupted and global supplies reduced.
Crude prices initially gave up early gains and briefly turned lower following a bearish weekly EIA inventory report.
Oil moved higher later in the session after President Trump pledged to intensify the bombardment until Iran halts attacks on Hormuz shipping and reopens the strait. Iran retaliated with missile and drone strikes targeting Kuwait.
Supplies may tighten further due to reduced transit through the Strait of Hormuz. The International Maritime Organization warned Wednesday that crossing the strait is currently too dangerous, with visible traffic dropping sharply in recent days.
Crude and products also drew support from a stronger crack spread, which surged to a record high on Wednesday and may encourage refiners to increase crude purchases for gasoline and distillate output.
Additional support came as Ukraine stepped up drone attacks on Russian oil infrastructure. Russian crude production fell to 8.928 million barrels per day in June, a 2.5-year low per monthly OPEC data. EA Analytics reported Russian crude-processing rates averaged 3.91 million bpd in the first ten days of July, the lowest in 21 years, after facility damage from Ukrainian strikes. Bloomberg noted Ukrainian forces have hit Russian fuel sites more than 50 times this year, affecting at least 24 of 34 major refineries. By end-June, about 90% of Russian regions faced fuel rationing or shortages, prompting export bans on most motor and aviation fuels. Russia is the world’s second-largest diesel exporter after the US, according to Vortexa.
Countering that, stronger Russian crude exports added supply. Bloomberg data showed the four-week average of Russian crude exports rose to 4.13 million bpd through June 28, the highest since its 2022 invasion, likely as damaged refineries pushed more crude outward.
Signs of rising global supply weighed on sentiment after the IEA said the UAE lifted June output to a record 4.1 million bpd.
On June 17, the IEA warned the Iran conflict would cut world oil demand by 1.1 million bpd this year, deeper than its prior 420,000 bpd estimate.
The DOE raised its 2026 US crude output forecast to 13.78 million bpd from 13.72 million, a bearish signal.
OPEC delegates said May 14 the cartel plans further quota increases through September, having already restored two-thirds of its 1.65 million bpd 2023 cut. OPEC+ agreed Sunday to lift August output by 188,000 bpd, though regional war restarts may complicate this. June OPEC output rose 2.34 million bpd to 18.75 million.
Vortexa reported Monday that crude on stationary tankers fell 32% week-on-week to 82.85 million barrels for the week ended July 10.
Wednesday’s EIA data was bearish: crude stocks fell 1.69 million barrels vs 2.1 million expected; gasoline drew 1.5 million vs 2.0 million expected; distillates rose 4.56 million vs a 1.85 million decline expected; Cushing stocks rose 430,000 barrels.
The EIA also showed US crude inventories as of July 10 were 6.2% below the five-year average, gasoline 8.4% below, and distillates 11.1% below. Output held at 13.861 million bpd, just under the record 13.862 million.
Baker Hughes said active US oil rigs held at a 13-month high of 445 last week, up from a 4.25-year low of 406 in December 2025 but well below the 627 peak in December 2022.