Oil prices rise as US-Israeli conflict escalates with Iran
Tuesday, oil prices increased for a third consecutive day as fears of supply disruptions from the Middle East region grew due to the U.S. - Israel conflict and threats against shipping through the Strait of Hormuz.
Brent crude futures stood at $78.83 per barrel by 17:00 GMT, up $1.10 or 1.4%. On Monday, it surged to as high as $82.37 - its highest level since January 2025 - but then pared these gains, settling 6.7% higher.
U.S. West Texas Intermediate Crude jumped 74-cents or 1% to $71.97 per barrel. The contract reached its highest level since June 2025 in the previous session before settling at 6.3%.
Tony Sycamore said that the upside risks are still present and will only increase the longer the conflict continues. The U.S.-Israeli air war against Iran intensified on Monday, with Israel attacking Lebanon while Iran responded with strikes against energy infrastructure and tankers in Gulf countries.
On an average day, tankers and ships transporting diesel, gasoline, and other fuels, including to China and India, pass through the Strait of Hormuz. About 20% of the world’s liquefied gas is transported through the waterway.
As insurers have canceled their coverage, tankers and container vessels are avoiding waterways.
Iranian media reported that a senior Iranian Revolutionary Guards official said on Monday the Strait of Hormuz was closed and Iran would fire on any ship attempting to pass.
Iranian news agencies reported that the Revolutionary Guards had earlier claimed that a fuel-tanker flying the Honduran flag, Athe Nova, was burning in the Strait, after two drones were fired at it.
Analysts predict that oil prices will remain elevated over the next few days as markets continue to focus on the effects of the escalating Middle East conflict.
Bernstein raised its Brent oil price assumptions for 2026 from $65 to $80 per barrel. However, Bernstein sees prices as high as $120-$150 if a prolonged conflict is severe.
Futures on refined products are also rising as the Middle East, a major supplier of fuels, is at risk. Saudi Arabia closed its largest domestic oil refinery on?Monday after a drone attack.
U.S. ultra low-sulfur?diesel?futures rose 3.1% to $2.991 on Tuesday after hitting a two-year-high on Monday. Meanwhile, gasoline futures rose 1.1% following a 3.7% increase in the previous session.
After gaining 18% on the previous day, European gasoil futures rose 2.7% to $909.50 per metric ton.
(source: Reuters)
