Oil prices rose on Tuesday as renewed military exchanges between the United States and Iran heightened fears of further disruptions to crude supplies from the Middle East.
Brent crude futures gained $1.18, or 1.3 per cent, to $91.67 a barrel by 7:39 a.m. GMT, while US West Texas Intermediate crude rose $1.27, or 1.48 per cent, to $87.03.
The latest price increase followed renewed attacks between Washington and Tehran, with US President Donald Trump threatening further strikes against Iran after the two countries exchanged direct attacks for the first time since late July.
The development has revived concerns that the conflict, which had recently shifted towards an economic standoff, could escalate again and put global oil supplies under greater pressure.
PVM analyst John Evans said the latest missile exchanges had strengthened expectations that the conflict could continue for an extended period, even if it did not become a permanent war.
Iranian President Masoud Pezeshkian said on Tuesday that Tehran was prepared to immediately reciprocate if the United States returned to its commitments under an interim peace agreement signed in June.
However, diplomatic efforts to restore shipping through the Strait of Hormuz have so far failed to produce a breakthrough.
Qatar and Oman have been leading efforts to broker an agreement that would allow shipping through the strategic waterway to resume normally.
The Strait of Hormuz is particularly important to the global oil market because about one-fifth of the world’s oil supplies passed through the waterway before the conflict began in late February.
Shipping activity remains significantly below normal levels. Data from shipping analytics firm Kpler showed that only about five visible commodity vessels passed through the Strait on Monday, compared with a 10-day average of around 14 vessels.
None of the five vessels was a liquid tanker, underscoring the continuing difficulties facing oil shipments through the waterway.
The risks to maritime traffic were further highlighted on Tuesday after the United Kingdom Maritime Trade Operations agency said a tanker reported being struck by three projectiles while sailing out of the Strait of Hormuz.
No casualties or environmental damage were reported following the incident.
Despite satellite tracking companies estimating that about six million barrels of oil per day are still moving through the Strait, analysts at ANZ said the volume remained well below pre-conflict levels.
The analysts also warned that the global oil market was beginning to lose some of the supply buffers that had helped cushion the disruption.
They also noted that US oil inventories were approaching minimum levels, while China’s ability to maintain lower imports could come under pressure as seasonal demand increases.
The prolonged disruption is also raising expectations of sustained high oil prices.
A Reuters poll of analysts conducted in August showed that crude prices are expected to remain above $80 a barrel throughout 2026 as shipping disruptions persist.
The latest increase in oil prices highlights the vulnerability of the global energy market to developments around the Strait of Hormuz, where any prolonged disruption could have consequences far beyond the Middle East.
Reuters.
