TLDR
- Brent crude rose past $104 per barrel and WTI hit approximately $97 amid Iran’s ongoing attacks on Middle Eastern energy infrastructure
- Operations at the United Arab Emirates’ Shah gas field were paused, and crude loading activities at Fujairah Port were stopped
- The Strait of Hormuz continues to be mostly blocked, impacting about 20% of the world’s oil supply
- Oil prices have increased by over 40% since the conflict started three weeks ago
- Key central banks like the Federal Reserve, European Central Bank, and Bank of Japan are convening this week as worries about energy-fueled inflation intensify
Oil prices spiked again on Tuesday following a short-lived dip, as the conflict involving the U.S., Israel, and Iran entered its third week without any indication of abating.
Brent crude went above $104 a barrel, and West Texas Intermediate (WTI) reached roughly $97. Both benchmarks bounced back after falling by 3-5% on Monday.
Iran kept targeting energy infrastructure throughout the region. Operations at the UAE’s Shah gas field were suspended, and an Iraqi oil field was also struck by drones and missiles.
Crude loading operations at the UAE’s Fujairah Port were stopped once more, per a note from Inchcape Shipping Services. Both the UAE and Kuwait have cut oil production even more in reaction to the ongoing attacks.
Oil prices have risen over 40% since the war started, though they declined on Monday after the U.S. announced it would release the first batch of emergency crude reserves.
Strait of Hormuz Takes Center Stage in the Crisis
The Strait of Hormuz—through which roughly 20% of the world’s oil supply flows—continues to be mostly blocked. Iran effectively closed the shipping lane earlier this month.
A small breakthrough occurred on Monday when gas tankers flying the flags of India and Pakistan passed through successfully. Iran has indicated it will let ships from specific countries transit while targeting vessels linked to the U.S. and its allies.
JPMorgan analysts noted that transit through the strait is likely to become “increasingly conditional,” as Iran will allow passage depending on a vessel’s national origin.
Several ships have made their way through using a route that lies unusually close to Iran’s shoreline, per Bloomberg’s ship-tracking data.
Saudi Arabia is rushing to increase its exports via an alternative route that completely avoids the Strait of Hormuz.
U.S. President Donald Trump urged at least seven nations—including China—to assist in reopening the strait. These requests were mostly turned down. Trump threatened to expand strikes on Kharg Island to target Iranian oil infrastructure, having previously refrained from attacking energy assets there.
Treasury Secretary Scott Bessent told CNBC that the U.S. is letting Iran keep shipping crude through the waterway and has not interfered in energy derivatives markets.
Inflation Concerns Pressure Global Markets
The steep increase in oil prices has stoked fears of energy-driven inflation. Several major central banks—such as the Federal Reserve, European Central Bank, and Bank of Japan—are set to meet this week.
Many Asian economies rely heavily on oil imports that pass through the Strait of Hormuz, making the ongoing closure a major worry for those markets.
Israel stated on Tuesday that it had killed senior Iranian officials, including security chief Ali Larijani. As of Tuesday, Iran had not verified the claim.
The number of Iranian ships crossing the waterway reached a wartime peak on Monday, including an oil tanker bound for China, per Bloomberg data.
