WTI Settles at $96.02, Brent at $97.81 as Iran Strikes Kuwait Airport and Iraq Ceyhan Pipeline Covers 23% of Pre-Conflict Export Volume

WTI crude settled at $96.02 per barrel on Wednesday's CME close, a gain of 2.4% on the day. Brent crude settled at $97.81 per barrel on the ICE, rising 1.9%. Both benchmarks marked a third consecutive daily gain, with WTI posting a weekly advance of roughly 9.6% through Wednesday's settlement, per Rigzone.

Iran Targets Kuwait Airport in Overnight Strike

Iran's Revolutionary Guard launched drones and missiles at Kuwait International Airport overnight, striking Terminal One and causing at least one fatality and significant material damage. Kuwaiti authorities suspended all air traffic and diverted flights to alternative airports. U.S. Central Command intercepted additional Iranian projectiles targeting Kuwait and Bahrain, then launched retaliatory strikes against an Iranian military control facility on Qeshm Island, near the Strait of Hormuz. UAE Presidential Advisor Anwar Gargash called on Gulf states for "a firm, unified and cohesive Gulf stance" in response to Iran's "repeated aggression."

Kuwait Output: Six to Eight Weeks to Restore 70 Percent, Another Month for the Rest

Kuwait Petroleum Company's managing director for international marketing, Shaikh Khaled Ahmad Al-Sabah, stated Wednesday that Kuwait would need six to eight weeks to recover roughly 70% of normal crude output after the Strait of Hormuz reopens. Restoring the remaining 30% would require roughly another month. Refining operations are expected to normalize within two to three weeks of reopening, faster than crude production recovery. The phased timeline means Kuwaiti crude volumes will remain constrained long after any diplomatic resolution of the Hormuz standoff.

Iraq Ceyhan Pipeline: 770,000 bpd Target Covers 23% of Pre-Conflict Export Volume

Iraq restarted production at West Qurna 1, Majnoon, and Fauqi fields, lifting national output to roughly 1.5 to 1.6 million barrels per day. The government is targeting an expansion of the Iraq-Turkey Ceyhan pipeline from its current 220,000 bpd throughput to 770,000 bpd within two and a half months. That 770,000 bpd target represents roughly 23% of Iraq's pre-conflict average export volume of 3.3 million bpd. Iraq's seaborne exports collapsed to just 96,000 bpd in May 2026, a 97% decline from year-earlier levels.

The combined supply picture shows why a Hormuz reopening alone would not immediately relieve crude prices. Iraq needs months to ramp the Ceyhan route from 220,000 bpd to its 770,000 bpd target, while Kuwait faces 10 to 12 weeks of phased output restoration. The structural shortfall between Iraq's 770,000 bpd non-Hormuz export ceiling and its pre-conflict 3.3 million bpd export volume represents roughly 2.5 million bpd with no viable rerouting path in the near term.

U.S. Inventory Draws Add to Supply Pressure

EIA data released Wednesday showed U.S. nationwide petroleum stockpiles fell for eight consecutive weeks, the longest draw streak since early 2022. Crude stocks at Cushing, Oklahoma approached minimum operating levels after six consecutive weekly declines. Minimum operating levels mark the floor below which pipeline and terminal infrastructure requires a physical buffer to function. Those domestic supply conditions extended the geopolitical bid in crude markets through Wednesday's settlement.

Forecaster Divergence: Rystad at $180, Goldman Flags Demand Risk

Rystad Energy analysis published Wednesday projected that sustained U.S.-Iran escalation could push oil prices to $180 per barrel by August 2026. Goldman Sachs warned separately that demand destruction at sustained elevated prices could partially offset the supply shock. Saxo Bank Head of Commodity Strategy Ole Hansen attributed Wednesday's rally to "market pessimism regarding prospects for a U.S.-Iran agreement," per OilPrice.com. HSBC flagged the potential for a supply "super-squeeze" in global oil markets. Rystad and Goldman represent opposing positions on whether supply scarcity or demand erosion drives the trajectory from current price levels.