Global oil prices climbed to their highest level in four weeks on Tuesday as escalating military tensions between the United States and Iran raised fresh concerns over energy supply disruptions.
The surge followed Washington’s decision to reinstate a naval blockade on Iran, while Tehran intensified retaliatory attacks in and around the strategically important Strait of Hormuz.
Brent crude futures increased by $1.68, or 2%, to $84.98 per barrel in early trade, while US West Texas Intermediate (WTI) crude rose $1.65, or 2.1%, to $79.79 per barrel.
The latest gains came after Brent had already jumped 9.6% in the previous session, marking its biggest single-day rise since May 2020.
The rally pushed oil prices to their highest levels since the United States and Iran signed a memorandum of understanding on June 17 aimed at ending the conflict.
However, renewed hostilities have revived fears of possible disruptions to one of the world’s most critical energy transit routes.
US President Donald Trump announced that Washington had restored the naval blockade on Iranian shipping through the Strait of Hormuz and said the United States would seek reimbursement from countries benefiting from its maritime protection efforts.
Trump stated that US forces were targeting Iran’s offensive capabilities and had regained control over the strategic waterway.
The decision represents a shift from the traditional US policy of supporting unrestricted navigation through the Strait of Hormuz, a route through which a significant portion of global oil supplies passes.
Tensions in the Gulf intensified further after the United Arab Emirates’ Ministry of Defence reported that two UAE oil tankers were struck by Iranian cruise missiles while travelling through the southern shipping lane of the Strait of Hormuz in Omani territorial waters.
The incident resulted in the death of one Indian crew member, while eight others were injured.
The latest developments have increased uncertainty in global energy markets, with traders closely monitoring the security situation around the Strait of Hormuz.
Any prolonged disruption in shipping activity through the waterway could place additional upward pressure on crude prices and fuel inflation concerns worldwide.
