Oil contracts surged more than $5 by midday Wednesday, after a new round of fighting in the Middle East dampened expectations that the region's vital petroleum supply to the world will return to normal anytime soon.

At 11:45 a.m. ET, the September NYMEX West Texas Intermediate crude contract was up about $5.30 to $84.50/bbl and October WTI was $4.55 higher to $81.70/bbl.

London-based September ICE Brent was up around $6 to $90.10/bbl and October Brent was $5.35 higher to about $87.45/bbl.

Wednesday's solid rebound followed a sharp three-day pullback that had sent the oil benchmarks about $13-16 lower during the span due to a brief pause in fighting between the U.S. and Iran since the past weekend.

The U.S. military intercepted Iranian ballistic missiles aiming at American troops stationed in Jordan early Wednesday local time. Shortly after, the U.S. and Saudi Arabia launched strikes in Iraq against Iran-backed groups that the Islamic Revolutionary Guard Corps had previously directed to attack U.S. troops and Saudi energy infrastructure.

Turning to refined products, diesel prices sharply outperformed those of gasoline. More-active September NYMEX ULSD was up 17.85cts to $4.1915/gal and August ULSD was 17.95cts higher to $4.3305/gal. September RBOB was up 7.65cts to $3.2205/gal and August RBOB was 4.7cts higher to $3.815/gal.

Darren Dohme, principal at petroleum consultant The Fuel Hedge, said in a Wednesday note that the spread between NYMEX ULSD and RBOB increased to around 95cts/gal, the widest gap since the start of the Middle East conflict in late February.

While crude oil contracts jumped in response to the renewed fighting, diesel's rally was not driven by any news headlines, according to Dohme.

"It is the market saying the world is short of diesel specifically, and a peace deal would not fix it," he said.

Analysts have cited Russia's diesel export ban earlier this month and the lack of distillate-rich crude supply via the Persian Gulf for a more pronounced diesel shortage worldwide.

The energy market is now digesting the latest Energy Information Administration weekly data.

Total U.S. crude inventories dropped by 11 million bbl to 712.2 million bbl during the week ended Friday, the lowest level in more than 11 years and 117.3 million bbl lower than this time last year, EIA data showed. U.S. gasoline supplies remained unchanged amid solid demand while distillate inventories grew by 1.1 million bbl.