Oil prices surges avove $91 as Iran war fuels Horm…
Oil prices climbed on Tuesday, with Brent crude moving above $91 a barrel as stalled diplomacy over the Iran conflict raised fresh concerns about global energy supplies.
Brent futures gained 27 cents, or 0.3%, to $91.14 a barrel, while US West Texas Intermediate rose 42 cents to $85.04. WTI had earlier reached $85.37, its highest level since July 31.
Markets remained tense after Iran signalled a shift toward a more offensive military posture, while Washington ruled out extending a temporary ceasefire. Progress toward reopening the Strait of Hormuz to normal tanker traffic has also slowed, adding to fears of prolonged supply disruptions.
Only a handful of commodity vessels crossed the strategic waterway over the weekend, sharply below normal traffic levels. Concerns were further heightened by attacks in the Red Sea, reinforcing fears over disruptions at both the Strait of Hormuz and Bab el-Mandeb.
Despite the growing tensions, reports of possible back-channel contacts between the US and Iran offered a limited sign of hope for renewed diplomacy. Meanwhile, markets are also watching US crude inventories, which are expected to have declined last week.
Earlier, Oil prices climbed on Monday as uncertainty over a possible diplomatic breakthrough between the United States and Iran increased, while a sharp slowdown in tanker movements through the Strait of Hormuz heightened concerns about disruptions to global crude supplies.
Brent crude futures gained as much as 1% during early trading to reach $89.40 per barrel. The benchmark was later up 72 cents, or about 0.8%, at $89.20 a barrel by 0229 GMT.
US West Texas Intermediate (WTI) crude also moved higher, rising 44 cents to $82.83 per barrel.
Both international benchmarks posted gains of more than 5% last week after a series of attacks involving energy and shipping assets in and around the strategically important Strait of Hormuz. The incidents have intensified fears that further escalation could affect one of the world’s most important oil transit routes.
Market sentiment was further affected by developments over the weekend, when Iranian Foreign Minister Abbas Araqchi said Tehran had yet to decide whether it would resume negotiations with Washington. US President Donald Trump, meanwhile, told Americans to prepare for somewhat higher gasoline prices as the conflict continues.
Analysts said the renewed uncertainty had brought geopolitical risk back into crude markets after oil prices had previously come under pressure on expectations that diplomatic efforts could ease tensions.
“Oil prices have now rebounded almost completely from the lows seen in early August, as hopes for a more permanent resolution between the US and Iran have faded and geopolitical risk premiums have returned to the market,” said Priyanka Sachdeva, head of market insights at Phillip Nova in Singapore.
Sachdeva cautioned, however, that the rally could lose momentum unless there is evidence of a further deterioration in the situation.
She said the market would need to see renewed aggression in the Strait of Hormuz, particularly significant damage to oil tankers or energy infrastructure, before prices were likely to move substantially higher.
Hormuz shipping activity slows
Concerns over physical supply disruptions increased after ship-tracking data showed a marked decline in vessel traffic through the Strait of Hormuz over the weekend.
According to data from Kpler, only five commodity vessels crossed the strategic waterway on Saturday, while no such transits were recorded on Sunday. This compared with 31 commodity vessel crossings during the previous weekend.
The slowdown is significant because the Strait of Hormuz is a critical route for international energy shipments. Any prolonged disruption could increase transportation risks, raise insurance costs and place additional upward pressure on crude prices.
The United Arab Emirates also accused Iran of attacking another vessel operated by Abu Dhabi National Oil Company (ADNOC) while it was passing through the strait on Friday, according to the Emirati state news agency WAM.
The UAE had earlier blamed Iran for two separate incidents involving ADNOC-operated vessels on Thursday evening.
The latest incidents have added to concerns among traders that the conflict could increasingly affect commercial shipping and energy infrastructure, rather than remaining confined to military and diplomatic confrontation.
The Strait of Hormuz remains particularly important to global oil markets because a substantial volume of crude and petroleum products moves through the waterway. Any sustained interruption could therefore have consequences well beyond the region.
For now, traders are closely monitoring developments involving US-Iran diplomatic contacts, attacks on shipping and the movement of tankers through the strait.
While the latest price gains reflect a higher geopolitical risk premium, analysts remain cautious about predicting a prolonged rally. If shipping activity resumes and diplomatic channels reopen, some of the premium built into crude prices could quickly unwind.
Conversely, additional attacks on tankers, oil facilities or other critical infrastructure could trigger a stronger market reaction and push prices higher as traders reassess the security of regional supplies.
