Oil prices advanced on Tuesday as renewed military exchanges between the United States and Iran brought attention back to the potential for supply disruptions from the Middle East.
Brent crude futures rose $1.18, or 1.3%, to $91.67 per barrel at 0739 GMT, while U.S. West Texas Intermediate crude gained $1.27, or 1.48%, to $87.03.
The moves followed renewed tensions after U.S. President Donald Trump on Monday raised the possibility of further strikes against Iran. The developments marked the first direct exchange of attacks between the two countries since late July.
“The tit-for-tat missile exchanges between the US and Iran bring validation to those who believe that even if not a ‘forever war’, this conflict will run and run,” PVM analyst John Evans said.
Strait of Hormuz traffic remains below earlier levels
Iranian President Masoud Pezeshkian said Tuesday that Iran would immediately reciprocate if the United States returned to its commitments under the interim peace agreement signed in June.
Qatar and Oman have been involved in mediation efforts aimed at reaching an agreement to reopen the Strait of Hormuz. Before the conflict began in late February, the waterway carried approximately one-fifth of global oil supplies.
Visible commodity vessel traffic through the strait remained at around five ships per day on Monday, compared with a 10-day average of approximately 14, according to Kpler shipping data. None of the five vessels were liquid tankers.
The United Kingdom Maritime Trade Operations agency said Tuesday that a tanker reported being struck by three projectiles while sailing out of the Strait of Hormuz. No casualties or environmental effects were reported.
“Despite satellite tracking firms suggesting oil flowing through Hormuz is around 6 million barrels per day, that is well below pre-conflict levels,” ANZ analysts said in a note.
Analysts monitor global oil inventories
ANZ analysts also pointed to the condition of global oil inventories as another factor affecting the market.
“In the meantime, the buffers the global oil market has been relying on are becoming exhausted. U.S. inventories are nearing minimum levels, while China’s ability to keep imports low will be tested as seasonal demand picks up.”
A Reuters poll conducted in August showed analysts expected oil prices to remain above $80 per barrel in 2026 as shipping disruptions continued.