Crude oil futures advanced following heightened US-Iran tensions after an Iranian drone was downed near a US aircraft carrier. The incident in the Arabian Sea sparked fresh supply concerns amid already tight global markets.

Brent crude climbed 1.2% while West Texas Intermediate gained 1.4%. The move reversed earlier losses and reflected renewed risk premium demands from traders. Market participants monitored developments closely for signs of broader conflict escalation.

Energy traders also weighed a larger-than-expected drawdown in US crude inventories reported by the API. Analysts noted the confluence of geopolitical shocks and fundamental tightness creates volatile price swings that complicate corporate hedging strategies.

Investors are watching for further OPEC+ output decisions and potential military responses. Additional supply disruptions could pressure refinery margins and increase fuel costs for airlines and shipping companies dependent on stable energy pricing.