Oil Prices Surge as Renewed US-Iran Tensions Raise Supply Concerns
Global oil prices jumped sharply on Tuesday, reaching their highest levels in around five weeks as renewed hostilities between the United States and Iran increased concerns about disruptions to crude supplies from the Middle East.
Brent crude futures gained $4.16, or 4.6%, to settle at $94.65 per barrel. US West Texas Intermediate (WTI) crude rose $4.46, or 5.2%, to finish at $90.22 per barrel.
The latest settlements marked the strongest closing levels for Brent since July 24 and WTI since July 23.
Renewed Fighting Raises Strait of Hormuz Concerns
The latest increase in oil prices followed new US air strikes against Iranian targets, reducing hopes that the exchange of attacks over the weekend would remain limited.
Oil markets had already been under pressure after reports that two tankers were hit while leaving the Strait of Hormuz, a critical route for global energy shipments.
Iran has continued to take a firm position over oil exports from the Gulf, while the United States has warned of further action and possible new sanctions.
Analysts said the renewed confrontation has increased concerns about prolonged disruptions to energy shipments through the Strait of Hormuz.
Diesel Prices Reach Multi-Year High
Diesel prices have also climbed significantly amid disruptions affecting refineries in several parts of the world, particularly in the Middle East and Russia.
US diesel futures reached their highest level in 52 months on Tuesday after rising about 51% over the past 10 weeks.
The increase has also pushed the diesel-crude refining margin, known as the crack spread, to a record level of around $107 per barrel, according to LSEG data.
Russia-Ukraine Conflict Adds to Market Concerns
Energy markets are also monitoring developments in the Russia-Ukraine conflict.
Russian air strikes reportedly killed 12 people and injured others in Kyiv and nearby areas early Tuesday, marking another day of heavy attacks.
Russia remains one of the world’s largest crude oil producers and is a member of the OPEC+ alliance, making developments involving its energy sector important for global oil markets.
US Oil Inventories in Focus
Traders are also awaiting the latest US oil inventory data from the American Petroleum Institute and the US Energy Information Administration.
Analysts expect US energy companies to have withdrawn around 800,000 barrels of crude from storage during the week ending August 28.
If confirmed, it would mark the first weekly decline in US crude inventories in five weeks.
The expected drawdown compares with a 2.4 million-barrel increase during the same week last year and an average decline of about 5.1 million barrels over the comparable five-year period from 2021 to 2025.
With geopolitical tensions and fuel supply concerns continuing to influence the market, traders are closely watching developments in the Middle East and the latest inventory figures for further direction on oil prices.
