Oil prices gained around $1 on Tuesday as the resumption of fighting between the U.S. and Iran in the Middle East renewed fears of supply disruptions from the world’s key crude-producing region.
Brent crude futures were up $1.05, or 1.2%, to $91.54 a barrel at 0455 GMT, while U.S. West Texas Intermediate crude was up $1.27, or 1.5%, to $87.03.
In the previous session, Brent closed up 2.7%, at one point reaching its highest since August 25, and WTI settled up 2.8%, touching its highest since August 21.
On Monday, U.S. President Donald Trump threatened further strikes against Iran following the first exchange of direct attacks between the countries in a month on Sunday, raising tensions in a conflict that had recently shifted into an economic standoff.
“These bring the potential for Iranian retaliation back into the equation. That in turn raises the prospect of damage to energy infrastructure around the Gulf and adds fresh uncertainty for shipping through the Strait of Hormuz. Both of those risks are being reflected in the firmer tone in crude prices,” said Tim Waterer, chief market analyst at KCM.
On Monday, the number of visible commodity vessels transiting the Strait of Hormuz heldat five per day, below the 10-day average of around 14, shipping data from Kpler showed. None of the five ships were liquid tankers.
Efforts by mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz, which carried about a fifth of global oil supplies before the war erupted in late February, have so far failed to gain traction.
Iran shut the waterway after the U.S. and Israel attacked the country on February 28.
Highlighting the risks that remain to shipping and oil supply, the United Kingdom Maritime Trade Operations agency (UKMTO) said on Tuesday a tanker reported being struck by three projectiles while sailing out of the Strait of Hormuz. No casualties or environmental impacts were reported.
“Despite satellite tracking firms suggesting oil flowing through Hormuz is around 6 million barrels per day, that is well below pre-conflict levels,” said ANZ analysts in a note.
“In the meantime, the buffers the global oil market has been relying on are becoming exhausted. U.S. inventories are nearing minimum levels, while China’s ability to keep imports low will be tested as seasonal demand picks up.”
Crude oil inventories in the U.S. Strategic Petroleum Reserve declined by about 3.1 million barrels last week, leaving stockpiles at 286.6 million barrels.
Analysts polled by Reuters in August expect oil prices to remain above $80 a barrel in 2026 as shipping disruptions continue.
(Reporting by Noel John and Sumit Saha in Bengaluru, Emily Chow in Singapore; Editing by Christian Schmollinger)