Oil Prices Surge 4% as Fresh US-Iran Fighting Revives Fears Over Global Supply
Oil prices rise as renewed US-Iran fighting fuels concerns over Middle East energy supplies.
Oil prices surged about 4 per cent on Tuesday, reaching their highest levels in roughly a week as renewed fighting between the United States and Iran revived fears of major supply disruptions across the Middle East.
Brent crude futures gained $3.44, or 3.8pc, to $93.93 a barrel at 1:10 p.m. EDT (1710 GMT). US West Texas Intermediate crude rose $3.72, or 4.3pc, to $89.48 a barrel.
The gains put Brent on track for its highest closing price since August 20. WTI was also heading toward its strongest close since July 23.
Fresh US-Iran Fighting Shakes Oil Markets
The latest Oil Prices rally came after the United States launched new air strikes against Iranian targets on Tuesday.
The strikes ended hopes that last weekend’s exchange of fire might remain limited. Instead, investors once again began assessing the possibility of a broader conflict and its potential impact on global energy supplies.
The market had already moved higher following the first direct US-Iran exchange of attacks since July. Reports that two oil tankers were hit while leaving the Strait of Hormuz added further pressure.
The strategic waterway remains at the centre of concerns because it handles a significant share of global oil shipments. Iran has effectively closed the route to commercial shipping during the conflict.
Tehran Warns of Wider Energy Disruption
Iran has continued to issue warnings over energy exports from the Gulf. Tehran has said it could prevent oil from leaving the region as tensions with Washington escalate.
US President Donald Trump has also threatened stronger military action if Iran continues its attacks.
The situation has increased uncertainty across energy markets. Traders are watching developments around the Strait of Hormuz closely because any prolonged disruption could affect crude supplies and push prices higher.
US Treasury Secretary Scott Bessent has also warned that Washington plans to introduce additional sanctions against Iran.
Diesel Prices Add to Market Pressure
The oil market is facing another source of pressure from disruptions at refineries.
Refinery problems have affected several regions, with the Middle East facing disruptions because of the US-Iran conflict. Russia has also experienced refinery disruptions following Ukrainian attacks.
US diesel futures climbed to around a 52-month high on Tuesday. Prices have risen about 51pc over the past 10 weeks, according to LSEG data.
The sharp increase has also pushed the diesel crack spread, a measure of refinery profit margins, to a record level near $106 a barrel.
Global Energy Markets on Alert
The combination of renewed military strikes, tanker incidents and uncertainty around the Strait of Hormuz has placed energy markets under renewed pressure.
A prolonged conflict could increase transportation risks and raise costs for oil buyers around the world. Higher crude and diesel prices could also feed into fuel costs and broader inflation.
For now, traders remain focused on whether the latest US-Iran escalation expands further or whether diplomatic efforts can prevent a wider disruption to global energy supplies.
