Oil prices rise as latest fighting resurrects Middle East supply disruption risks

Oil prices surged on Tuesday as renewed fighting between the U.S. and Iran in the Middle East reignited concerns about supply disruptions from the world's major crude producer. Brent crude futures climbed 56 cents, or 0.6%, to $91.05 a barrel, while U.S. West Texas Intermediate crude increased 83 cents, or 1%, to $86.59. Brent prices had reached their highest since August 25 in the prior session, with WTI touching its highest since August 21.

Tensions escalated following U.S. President Donald Trump's threat of further strikes against Iran following the first direct attacks between the countries in a month on Sunday. This renewed the potential for retaliation from Iran, which could damage energy infrastructure in the Gulf and pose fresh uncertainties for shipping through the Strait of Hormuz.

As of the weekend, the number of visible crude vessels traversing the Strait had dropped to five per day, according to shipping data from Kpler. Mediation efforts by Qatar and Oman to reopen the Strait, which carries around a fifth of global oil supplies, have thus far been unsuccessful. Iran closed the waterway after U.S. and Israeli attacks on February 28, February 28.

The UK Maritime Trade Operations agency reported on Tuesday that a tanker had been hit by three projectiles while sailing out of the Strait, though there were no casualties or environmental damage. President Trump recently announced a deal with Venezuela to control oil reserves, which he claimed would help replenish the U.S. Strategic Petroleum Reserve, which is close to its lowest level in 44 years.

Major U.S. oil companies like Chevron, GE Vernova, India’s ONGC, Italy’s Eni and Colombia’s GeoPark are expected to sign final agreements for energy projects in Venezuela. Currently, U.S. crude oil inventories in the Strategic Petroleum Reserve have fallen by around 3.1 million barrels last week, leaving stockpiles at 286.6 million barrels.

August polls of analysts anticipate oil prices to stay above $80 a barrel in 2026 due to ongoing shipping disruptions.