Oil prices extended their sharp rally on Wednesday, rising nearly 1 per cent in early trade as the latest US-Iran military escalation heightened fears that disruptions to crude supplies could worsen. Brent crude futures rose 87 cents, or 0.92 per cent, to $95.52 a barrel, while WTI posted its strongest rise since July 23 at $91.02.

The move came after both benchmarks surged more than $4 on Tuesday, with Brent recording its biggest daily gain since July 24.

The latest escalation in the conflict between the US and Iran has raised concerns among oil traders about the potential for further disruptions to crude supplies. The Strait of Hormuz, through which around one-fifth of the world's oil consumption passed before the conflict, has been effectively shut down to commercial shipping Attacks on two tankers leaving the strait on Monday have already forced traders to seek alternative crude supplies, and the latest US-Iran exchange has raised the risk of further disruption.

The United States said it carried out a series of overnight airstrikes against targets in Iran, while Tehran responded with attacks on US military positions across the region.

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Irgc warned that strikes would

The IRGC warned that the US strikes would further restrict traffic through the strategic waterway, and Iranian state media separately reported a large-scale drone attack on a US base in Bahrain. Jordan said its air defences intercepted 10 of 13 ballistic missiles that entered its airspace, with no reported American casualties from the attacks so far.

Kuwait said its armed forces were dealing with hostile drone activity. The escalation follows a weekend flare-up in fighting, the first since July, adding to uncertainty over the security of oil shipments from the region.

Oil inventory data provided another source of support for crude prices, with oil stocks in the world's largest producer falling 6 million barrels in the week ended August 28. Distillate inventories, including diesel and heating oil, declined 7 million barrels, also adding to the bullish sentiment.

The recent decline in oil inventories has helped to support crude prices, as traders become increasingly concerned about potential disruptions to supply chains.

The latest developments in the US-Iran conflict have sent shockwaves through the global energy market, with oil prices rising sharply in response. As the situation continues to unfold, traders and investors will be closely watching for any further developments that could impact crude supplies and prices.

With tensions running high, it's clear that the security of oil shipments from the region is a major concern, and any disruption could have significant implications for global energy markets.

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US Central Command said the strikes followed attempted attacks on US military personnel in Iraq, and that the operation was aimed at deterring future attacks. The IRGC warned that the US strikes would further restrict traffic through the strategic waterway, which is a critical chokepoint for oil supplies to the region.

The Iranian state media reported that Iran had targeted a US base in Jordan with ballistic missiles, and that its air defences had intercepted 10 of 13 ballistic missiles that entered its airspace.

The escalation has raised concerns about the potential for further disruptions to crude supplies, and has led to increased speculation about the impact on oil prices. As the situation continues to unfold, traders and investors will be closely watching for any further developments that could impact crude supplies and prices.

With tensions running high, it's clear that the security of oil shipments from the region is a major concern, and any disruption could have significant implications for global energy markets.