Oil Holds Gain as Middle East and Russia Strikes Threaten Supply

(Bloomberg) -- Oil held a gain as a flare-up in attacks from Russia to the Middle East threatened supply that only recently recovered to near pre-war levels.

West Texas Intermediate held near $95 a barrel, after rising 1% on Wednesday. Brent settled around $106. A cargo ship sank after being struck by "unknown projectiles" as it transited the Strait of Hormuz, while Iran-backed Houthis continued to launch missile and drone attacks across Saudi Arabia.

Meanwhile, Russia accused Ukraine of attacking two oil refineries on Wednesday, flouting an "energy ceasefire" promoted by US President Donald Trump. Kyiv denied the claim, which Bloomberg couldn't independently verify.

Brent has surged more than 70% this year as the US-Iran war roils energy markets. The depletion of stocks during the fighting has left global observed inventories 509 million barrels below pre-conflict levels, and on-land stockpiles near their lowest in at least a decade, the International Energy Agency said Wednesday, warning that supplies of diesel and other fuels will remain under pressure next year.

"If new attacks on oil infrastructure in the Middle East further disrupt petroleum supply in an already very tight physical market, energy costs and inflation would move even higher," said Bart Melek, global head of commodity strategy at TD Securities.

In the US, the industry-funded American Petroleum Institute reported nationwide crude inventories fell 11.1 million barrels last week, according to a document seen by Bloomberg. If confirmed by official data on Thursday, that would be the biggest drop since June 2025.