Oil Prices Surge on Major Crude Draw, Persistent Supply Concerns

U.S. oil prices rose sharply Tuesday afternoon, driven by a significant drop in commercial crude inventories and ongoing geopolitical tensions affecting global supply routes. West Texas Intermediate (WTI) crude settled at $93.45 per barrel, a gain of $1.29 or 1.4%, according to live price data. Brent crude climbed 0.87% to $95.81.

The American Petroleum Institute (API) estimated that U.S. crude oil inventories fell by 6.75 million barrels in the week ending May 29, according to a report from OilPrice.com. This draw was nearly double the 3.6 million barrel drop analysts had expected and follows a decline of 2.8 million barrels the prior week. Inventories at the Cushing, Oklahoma delivery hub also fell by 279,000 barrels.

Despite the recent draws, U.S. crude inventories have risen by 16 million barrels so far this year. The U.S. Strategic Petroleum Reserve (SPR) saw 8 million barrels leave storage last week, bringing the total to 357.1 million barrels—the lowest level since January 2024. U.S. production rose slightly to 13.715 million barrels per day for the week ending May 22.

The price rally occurs alongside warnings of prolonged supply risks. At a technical meeting at OPEC's Vienna headquarters on Monday, analysts told the group that disruption to shipping through the Strait of Hormuz will last through the end of the year, Rigzone reported. This key chokepoint handles about a fifth of global oil consumption.

For Bakken operators, the higher price environment is supportive, though a regional discount persists. The Bakken differential was quoted at $-3.42 versus WTI on Tuesday. The strength in WTI, bolstered by tightening U.S. stocks, directly benefits netbacks for North Dakota producers. However, the gasoline inventory picture is mixed; the API reported a build of 3.45 million barrels last week, which could pressure refining margins.

Other inventory data showed distillate stocks fell by 214,000 barrels and remain 11% below the five-year average, supporting diesel prices. The market also digested corporate news, with Russia's Rosneft reporting increased profit on higher oil prices for the first three months of 2026, though CEO Igor Sechin cited "significant operational risks" including infrastructure attacks, according to Rigzone.

The combined factors of substantial inventory draws and forecasts for enduring supply chain disruptions are providing a firm floor for oil prices as the summer demand season begins.