Oil prices climbed to a four-week high on Tuesday as renewed military tensions between the US and Iran raised concerns over energy flows through the Strait of Hormuz, a key route for global crude shipments.
Brent crude futures rose US$1.50 or 1.8% to US$84.80 per barrel, while US West Texas Intermediate (WTI) crude gained US$1.70 or 2.2% to US$79.84 per barrel. Both benchmarks had earlier advanced more than US$2 before easing from their highs, following Brent’s 9.6% jump in the previous session, its biggest daily increase since May 2020.
The latest gains came after the US reinstated a naval blockade of Iran, with President Donald Trump also proposing a 20% fee on cargo passing through the Strait of Hormuz. The move followed further exchanges between US and Iranian forces, adding fresh uncertainty to global oil supply.
“The latest escalation, including the U.S. reinstatement of the blockade and Iranian responses, has clearly injected fresh risk into the market,” said KCM Trade chief market analyst Tim Waterer.
“While a full closure hasn’t occurred, the competing objectives of both sides have made the supply picture highly uncertain,” he added.
Shipping activity through the Strait of Hormuz has also slowed, with data showing tanker movements falling to their lowest level in two months. Phillip Nova analyst Priyanka Sachdeva said the key factor for oil markets would be whether crude flows through the waterway face meaningful disruption.
“The key variable to monitor is the physical movement of crude through the Strait of Hormuz. Any meaningful blockage of tanker traffic, prolonged reduction in vessel movements, or disruption to export flows would likely trigger another leg higher in oil prices,” she said.
Meanwhile, further risks emerged after Yemen’s Houthi movement launched missile attacks towards Saudi Arabia, raising concerns over potential disruptions to crude shipments from the region.
Reuters
