Oil prices climbed on Tuesday, with crude gaining ground on renewed concerns over global supply after hopes for a lasting US-Iran peace deal faded and tensions around the Strait of Hormuz remained elevated.
Brent crude futures rose 27 US cents, or 0.3%, to US$91.14 a barrel by 0003 GMT, after reaching their highest level since July 30 in the previous session.
US West Texas Intermediate crude futures gained 42 US cents to US$85.04 a barrel, after rising more than 1% earlier to US$85.37, its highest level since July 31.
The latest move came after Iran said it would adopt a “fully offensive” military posture following stalled efforts to negotiate a permanent end to the conflict, while Washington ruled out extending a temporary ceasefire.
The prospect of prolonged disruption has also raised concerns over traffic through the Strait of Hormuz, a critical route for global oil shipments.
“Oil has jumped to start the week as U.S.-Iran relations look increasingly shaky. A deal to reopen the Strait of Hormuz still does not appear to be in sight, and shipping numbers remain at a trickle,” said KCM chief market analyst Tim Waterer.
Only five commodity vessels passed through the Strait of Hormuz on Saturday following attacks on tankers, with none recorded on Sunday, according to ship-tracking data from Kpler. This compares with 31 vessels during the previous weekend.
The supply concerns extend beyond Hormuz, with Yemen’s Houthis saying they had attacked a Saudi military ship and four escort vessels in the Red Sea with missiles.
“The dual chokehold on the Strait of Hormuz and the Bab el-Mandeb remains highly significant. These are not secondary concerns. They sit at the centre of the current supply-risk narrative,” Waterer said.
Iran is separately negotiating with Oman on an agreement to manage the Strait of Hormuz and has said the two sides are close to a deal. However, US President Donald Trump responded to the talks with a threat to bomb Oman, a longstanding US security partner.
There was nevertheless a potential opening for diplomacy after media reports said Trump had begun back-channel discussions with Iran’s Islamic Revolutionary Guard Corps.
Meanwhile, a preliminary Reuters poll showed US crude oil inventories were expected to have fallen last week, alongside declines in refined product stockpiles, adding another layer of support to oil prices.
Reuters
