Oil prices hit seven-week high on supply concerns

iOil prices rose about 3% on Wednesday, reaching a seven-week high, after U.S. crude inventories posted an unexpected decline and supply disruptions in Iraq, Venezuela, and Russia fueled concerns of tightening markets.

Brent crude gained $1.68, or 2.5%, to settle at $69.31 a barrel, while U.S. West Texas Intermediate (WTI) rose $1.58, also 2.5%, to $64.99.

The U.S. Energy Information Administration reported a 607,000-barrel drop in crude stocks last week, against expectations of a 235,000-barrel build.

The drawdown, though smaller than industry estimates, was seen as supportive, with declines recorded across crude, distillate, and gasoline inventories.

Prices were further lifted after Ukraine struck two Russian oil pumping stations in the Volgograd region, prompting a state of emergency in Novorossiisk, a key Black Sea export hub for oil and grain.

Analysts said the attacks, combined with speculation about new sanctions on Moscow, were tightening the supply outlook.

Russia is already facing shortages of some fuel grades as Ukrainian drone strikes disrupt refinery operations.

Meanwhile, Moscow’s finance ministry has proposed raising value-added tax from 20% to 22% in 2026 to fund the war effort and plug a widening budget deficit.

Russia, the world’s second-largest oil producer after the U.S. and a member of OPEC+, remains central to global energy markets.

In Washington, President Donald Trump signaled stronger backing for Kyiv, saying he believed Ukraine could reclaim all occupied territory.

His administration has also urged European nations to accelerate efforts to cut reliance on Russian oil and gas.