Oil prices rose by more than three per cent on Tuesday, extending recent gains as escalating hostilities between the United States and Iran heightened concerns over crude supply disruptions across the Middle East.
As of 10:00 a.m. WAT, Brent crude climbed 3.49 per cent to $94.19 per barrel, while West Texas Intermediate (WTI)advanced 3.76 per cent to $87.51 per barrel, lifting both global benchmarks to their highest levels in several weeks.
The latest rally reflects growing market anxiety over the security of oil exports from the Gulf, particularly as tensions continue to threaten major shipping routes including the Strait of Hormuz and the Bab el-Mandeb Strait.
The increase follows another night of U.S. military operations against Iranian targets, marking the 11th consecutive day of strikes. According to the U.S. Central Command (CENTCOM), the latest attacks targeted Iranian military operations centres, maritime assets, aircraft hangars, drone storage facilities and logistics infrastructure in an effort to weaken Iran's operational capabilities.
The renewed conflict has intensified concerns over the safety of commercial shipping after Iran was accused of carrying out repeated attacks on merchant vessels in recent months. Although U.S. officials maintain that the Strait of Hormuz remains open to international navigation, market participants continue to price in the growing risk of supply disruptions should hostilities escalate further.
Attention has also shifted to the Red Sea, where Yemen's Iran-backed Houthi movement has threatened to target vessels transporting Saudi crude through the Bab el-Mandeb Strait, one of the world's most strategic maritime oil corridors.
The threat has raised fresh concerns over alternative export routes relied upon by Gulf producers. Reports indicate that three Saudi oil tankers turned back in the Red Sea after the Houthis declared a blockade on Saudi oil shipments passing through the Bab el-Mandeb.
The latest developments have reinforced expectations of tighter global crude supplies, with traders increasingly factoring geopolitical risk into oil prices.
Analysts said the combination of military escalation, heightened shipping risks and uncertainty over key export routes has become the dominant driver of the oil market, outweighing broader supply and demand fundamentals.
Meanwhile, preliminary U.S. petroleum inventory data presented a mixed outlook. Industry figures showed increases in crude oil and distillate inventories, while gasoline stockpiles declined. Market participants are awaiting official inventory figures from the U.S. Energy Information Administration (EIA) for further direction.
The sustained rally in crude prices is expected to increase pressure on fuel import costs globally, particularly for countries dependent on imported petroleum products, as refiners and marketers adjust to higher replacement costs amid continued geopolitical uncertainty.
Market participants are also closely watching diplomatic developments, although there has been little indication of a near-term de-escalation. With military operations continuing across multiple fronts and threats to critical shipping lanes persisting, analysts believe geopolitical developments will remain the primary driver of oil prices in the near term.