Oil gains as renewed U.S.-Iran tensions raise risks to Hormuz oil flows

Oil prices surged on Tuesday in Asian trading following U.S. President Donald Trump's threat of further strikes against Iran. This renewed hostilities fueled concerns over potential prolonged disruptions to energy flows through the Strait of Hormuz. Brent Oil Futures for November and W&T Offshore Inc (WTI) crude futures both climbed about 1.5% to $91.87 and $87.15 per barrel respectively, marking a nearly 3% increase from the previous session's sharp rebound.

The escalation intensified after U.S. forces targeted Iranian military installations on Larak Island, leading Iran to retaliate with missile strikes on U.S. facilities in Jordan. President Trump pledged a robust response, raising fears of further threats to shipping in the Strait of Hormuz. The waterway remains a key concern for the oil market, with traders monitoring whether the latest tensions discourage tanker operators from utilizing the route and potentially hampering crude flows' recovery.

A tanker was struck by three projectiles while exiting the strait on Monday, according to the United Kingdom Maritime Trade Operations agency, highlighting the ongoing risks to commercial shipping. Meanwhile, supply concerns overshadowed OPEC+ producers' recent commitment to increase output by approximately 188,000 barrels per day.

Russia's extension of its diesel export ban until September 30 also exacerbated concerns over refined fuel supplies. President Trump announced on Sunday that oil secured under a new agreement with Venezuela would replenish the U.S. Strategic Petroleum Reserve, which has fallen to its lowest level in 44 years. As of August 21, the reserve stood at around 290 million barrels after years of drawdowns.

However, it remains uncertain how swiftly the Venezuelan deal could translate into additional crude supplies.