August NYMEX West Texas Intermediate crude futures dropped 65 cents to $78.65 per barrel by midday, while September Brent slipped 85 cents to $83.85. The retreat follows President Trump’s decision to reimpose a U.S. blockade on Iranian ports, a move triggered by attacks on commercial vessels in the Strait of Hormuz that effectively shattered a three-month cease-fire.

Market volatility extended to refined products, though with mixed results. August ULSD futures fell 13.65 cents to $3.878 per gallon, while August RBOB gasoline rose 3.3 cents to $3.26 per gallon. The uncertainty is compounded by the threat of further conflict along the Bab al-Mandeb strait, a critical maritime chokepoint.

Energy Information Administration figures released Wednesday provided further signals for traders to digest. Domestic crude inventories dipped by 1.7 million barrels to 409.7 million, and gasoline stocks fell by 1.5 million barrels. Conversely, distillate inventories climbed by 4.6 million barrels to 108.2 million. Despite the weekly build in distillates, all three categories remain significantly below their respective five-year averages.