Oil prices climbed to their highest level in four weeks on Tuesday as renewed fighting between the United States and Iran raised concern over crude shipments through the Strait of Hormuz.
The move extended a sharp rebound that began after hopes for a lasting peace agreement faded during the weekend trading period.
Brent crude futures rose 3.29% to $86.04 a barrel by 07:51 GMT. US West Texas Intermediate crude gained 2.83% to $80.35. Both benchmarks reached their highest levels since mid-June.
The latest rise followed a 9.6% jump in Brent during the previous session, its largest one-day gain since May 2020. Traders responded after Washington restored its naval blockade of Iranian shipping and announced a proposed 20% fee for vessels using the waterway.
The United States also carried out a third straight night of strikes against Iran. Tehran responded with attacks on military sites and commercial ships. Two United Arab Emirates tankers were hit in Omani waters, according to the UAE Ministry of Defence. One Indian sailor died and eight crew members suffered injuries.
Shipping activity through the Strait of Hormuz dropped to a two-month low as vessel operators assessed the growing security risk. The route carried about one-fifth of global oil and liquefied natural gas supplies before the conflict began, making tanker movement a key factor for crude prices.
MarineTraffic recorded 57 transits from Friday through Sunday, down more than 50% from the previous week. Around 130 vessels used the route each day before the United States and Israel began strikes on Iran in late February. Iran declared the strait closed “until further notice,” while Washington said military escorts kept oil moving.
Market analysts said the next price move would depend on whether tanker traffic and export volumes fall further. Priyanka Sachdeva of Phillip Nova said a prolonged drop in vessel movement could send oil prices higher. She added that prices could ease if crude shipments keep moving through the strait.
ANZ analyst Soni Kumari said the failure of the June 17 memorandum of understanding returned supply fears to the market. She placed oil in an $85-to-$90 range if disruptions persist. TD Securities strategist Bart Melek said Brent could approach $100 if the market faces signs of a physical shortage.
Meanwhile, Iran’s oil minister said the country’s crude exports were operating normally despite the end of a US sanctions waiver. Yemen’s Houthi movement also fired missiles at Saudi Arabia after accusing the kingdom of bombing an airport under its control.
China’s June crude imports fell 41.3% to their lowest level in almost a decade. Refinery activity also reached a 10-year low amid weak domestic demand and export limits. US inventory data was expected to show a drop in crude stocks, while gasoline and distillate supplies likely increased during the week.
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