Oil extends gains to near six-week highs on new Middle East supply risks

Brent crude futures rise $1.84, or 2.0%, to $92.85 a barrel

Oil prices extended gains to trade near six-week highs on Wednesday as fears of further supply disruptions intensified after US forces struck Iranian military targets for the 11th straight night, while ​oil tankers made U-turns in the Red Sea after warnings by the Iran-backed Houthi militia.

Brent crude ‌futures rose $1.84, or 2.0%, to $92.85 a barrel, the highest since June 11. US West Texas Intermediate crude climbed $1.67, or 2%, to $86.01, its highest since June 12.

The gains came after oil settled at a five-week high on Tuesday in the ​wake of US forces striking targets in southern and western Iran, while Iran attacked US facilities ​in Bahrain, Kuwait and Jordan.

The US military said it began its latest strikes on Iran ⁠late on Tuesday in the United States, or early Wednesday in Iran. The US attacks came a ​short while after the Kuwaiti army said its air defences were intercepting Iranian drones on Wednesday.

The constant trading of ​strikes has raised fears of further disruptions to global energy supplies after Yemen's Iran-aligned Houthis opened a new front in the Iran war by threatening to target vessels carrying Saudi oil in the Bab el-Mandeb Strait and announcing a naval blockade ​of Saudi Arabia.

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The Bab el-Mandeb waterway at the southern entrance to the Red Sea has become an ​increasingly important route for Saudi Arabian crude exports as traffic through the Strait of Hormuz has fallen sharply since a ceasefire between ‌the United ⁠States and Iran collapsed earlier this month.

Three oil tankers loaded with Saudi crude for China and India made U-turns in the Red Sea on Tuesday, heading towards the Suez Canal rather than braving the Yemeni coast following a warning from Yemen's Iran-aligned Houthi militia.

"This would force tankers to enter and exit the Red Sea via ​the Suez Canal, adding ​significant time and expense ⁠to voyages to Asia," said ING commodity strategists on Wednesday, adding that tensions in the Black Sea also added to supply uncertainty.

The Caspian Pipeline Consortium has stopped receiving ​oil from Kazakhstan after suspending loadings on Monday due to attacks on oil ​tankers at its ⁠Black Sea terminal blamed on Ukrainian drones. Ukraine has not commented on the attacks.

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"The longer the suspension drags on, the greater the likelihood that Kazakhstan will be forced to curb upstream production," said ING.

Data from the American ⁠Petroleum Institute ​showed that US crude and distillate inventories rose last week, ​while gasoline stockpiles fell, market sources said. The inventory data comes ahead of official figures from the US Energy Information Administration on Wednesday.