Crude oil prices moved higher on Tuesday as renewed military activity involving the United States and Iran increased attention on potential supply disruptions in the Middle East.
At 0739 GMT, Brent crude futures were up $1.18, or 1.3%, at $91.67 per barrel. U.S. West Texas Intermediate crude increased $1.27, or 1.48%, to $87.03.
The increase followed comments from U.S. President Donald Trump on Monday indicating the possibility of additional strikes against Iran after 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.
Mediation efforts continue as Hormuz traffic remains reduced
Iranian President Masoud Pezeshkian said Tuesday that Iran would respond immediately if the United States resumed compliance with its commitments under the interim peace agreement signed in June.
Qatar and Oman are among the countries involved in mediation efforts aimed at reaching an agreement to reopen the Strait of Hormuz. The waterway accounted for approximately one-fifth of global oil supplies before the conflict began in late February.
Kpler data showed around five visible commodity vessels passing through the strait per day on Monday, compared with an average of approximately 14 over the previous 10 days. None of the five vessels were liquid tankers.
Shipping risks were also highlighted after the United Kingdom Maritime Trade Operations agency said a tanker reported being struck by three projectiles while leaving the Strait of Hormuz on Tuesday. 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.
Oil inventories add to market considerations
ANZ analysts also pointed to global oil inventories as a factor being monitored by 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.”
The combination of reduced shipping activity through the Strait of Hormuz and inventory levels remains among the factors being assessed by crude markets.
Analysts surveyed by Reuters in August expect oil prices to remain above $80 per barrel during 2026 as shipping disruptions continue.
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