Oil prices rose on Tuesday after the U.S. and Iran exchanged fire again over the weekend, reviving fears of supply disruption from the Middle East. President Trump threatened further strikes on Iran, while shipping data shows tanker traffic through the Strait of Hormuz still running far below pre-war levels.
Brent crude and WTI both climbed on Tuesday as renewed fighting between the U.S. and Iran put supply risk back at the center of the oil market. The move follows the first direct exchange of attacks between the two countries in a month.
Prices extend Monday's rally
Brent crude futures rose 66 cents, or 0.7%, to $91.15 a barrel at 0640 GMT, while WTI crude gained 70 cents, or 0.8%, to $86.46. In the previous session, Brent had closed up 2.7%, touching its highest level since August 25, while WTI settled up 2.8% to its highest since August 21.
The rally follows President Trump's threat of further strikes against Iran on Monday, after the first exchange of direct attacks between the two countries in a month took place on Sunday. Speaking at the Oval Office that evening, Trump said the U.S. was ready to "smack" Iran if necessary.
Hormuz traffic still thin, mediation stalled
Shipping data reviewed by Reuters points to the same risk. Kpler data shows five commodity vessels transited the Strait of Hormuz on Monday, below the 10-day average of around 14, and none of the five were liquid tankers. The UK Maritime Trade Operations agency also said a tanker reported being struck by three projectiles while sailing out of the strait on Tuesday, though no casualties or environmental damage were reported.
Efforts by Qatar and Oman to broker a deal reopening the strait, which carried about a fifth of global oil supplies before the war erupted in late February, have so far failed to gain traction. ANZ analysts noted that satellite tracking firms suggest flows through Hormuz are running around 6 million barrels a day, still well below pre-conflict levels.
Diesel squeeze adds to the pressure
The strain is not limited to crude. Russia has extended its diesel export ban until the end of the month amid continued Ukrainian strikes on its refineries, while diesel exports from the Middle East face their own constraints from the Hormuz blockade and regional refinery damage.
U.S. Strategic Petroleum Reserve stockpiles also shrank, falling by about 3.1 million barrels last week to 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.
Sources: Commodities & Futures News, Commodities Analysis & Opinion
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