Oil prices edged higher on Tuesday as renewed tensions between the United States and Iran heightened concerns over potential supply disruptions in the Middle East, with the continued closure of the Strait of Hormuz remaining a major risk for global energy markets.
Brent crude rose 55 cents, or 0.61%, to $91.04 a barrel, while US West Texas Intermediate (WTI) crude gained 79 cents, or 0.92%, to $86.55 a barrel at around 7.30 am IST.
The gains followed a sharp rise in the previous session. Brent settled 2.7% higher on Monday after touching its strongest level since August 25, while WTI closed 2.8% higher after reaching its highest level since August 21.
Fresh concerns emerged after the US and Iran engaged in their first direct exchange of attacks in a month on Sunday. US President Donald Trump on Monday threatened further strikes against Iran, raising tensions after the conflict had recently shifted towards an economic confrontation.
Attention in the oil market remains firmly focused on the Strait of Hormuz, a critical route for global energy shipments. Shipping data from Kpler showed that only five visible commodity vessels a day passed through the waterway over the weekend.
Before the conflict began in late February, the strait handled around a fifth of global oil supplies. Iran closed the waterway after the US and Israel attacked the country on February 28.
Efforts by Qatar and Oman to broker an agreement to reopen the Strait of Hormuz have so far made little progress. Concerns over shipping intensified on Tuesday after the United Kingdom Maritime Trade Operations agency (UKMTO) said a tanker reported being hit by three projectiles while sailing out of the strait. No casualties or environmental damage were reported.
Developments in Venezuela are also drawing attention as the US seeks to rebuild its oil reserves. Trump announced an agreement with Venezuela on Friday to control oil reserves in the country and later said the arrangement would help replenish the US Strategic Petroleum Reserve, which is near a 44-year low.
Energy companies are also moving closer to agreements on projects in Venezuela. India’s ONGC, along with US companies Chevron and GE Vernova, Italy’s Eni and Colombia’s GeoPark, are expected to sign final agreements following months of negotiations over energy projects in the OPEC member country, according to sources familiar with the preparations.
Meanwhile, the US Strategic Petroleum Reserve declined further last week, with crude inventories falling by around 3.1 million barrels to 286.6 million barrels.
With uncertainty over Middle East supplies and shipping routes persisting, analysts surveyed by Reuters in August expect oil prices to remain above $80 a barrel in 2026.
