Oil Rises as US-Israeli Conflict with Iran Expands

PUKMEDIA

Oil prices.

Oil prices rose for a third consecutive day on Tuesday as the widening conflict between the United States, Israel and Iran, along with growing threats to shipping through the Strait of Hormuz, heightened fears of supply disruptions from the key Middle Eastern producing region.

According to Reuters report, Brent crude futures were at $79.44 a barrel, up $1.70, or 2.2%, by 0400 GMT. On Monday, the contract surged to as high as $82.37, its highest since January 2025, though it pared those gains to settle 6.7% higher.

U.S. West Texas Intermediate crude jumped $1.17, or 1.6%, to $72.40 a barrel. In the previous session, the contract initially climbed to its highest since June 2025 before sliding back to still settle up 6.3%.

The U.S.–Israeli air campaign against Iran widened on Monday, with Israel launching attacks in Lebanon and Iran responding with strikes targeting energy infrastructure in Gulf countries, as well as vessels in the Strait of Hormuz.

Shipping activity through the strategic waterway has been significantly disrupted. Tankers and container ships are increasingly avoiding the Strait after insurers suspended coverage for vessels operating in the area. Global oil and gas shipping rates have surged amid mounting security concerns.

Iranian media reported that a senior official of the Islamic Revolutionary Guard Corps warned that the Strait of Hormuz had been closed and that any vessel attempting to pass could be targeted. Approximately 20% of the world’s oil and gas supplies transit through the Strait of Hormuz, making it one of the most critical chokepoints in global energy markets.

Israeli Prime Minister Benjamin Netanyahu said the conflict “may take some time,” but added that it would not last for years.

Energy markets reacted sharply to the escalating tensions. Analysts expect oil prices to remain elevated in the coming days as investors assess the risk of prolonged disruption. Investment firm Bernstein raised its 2026 Brent crude price forecast from $65 to $80 per barrel, while warning that prices could surge to between $120 and $150 per barrel in the event of an extended conflict.

Refined fuel markets also rallied, reflecting concerns over supply risks in the Middle East. Saudi Arabia temporarily shut down its largest domestic oil refinery following a reported drone strike.

In U.S. trading, ultra-low sulfur diesel futures rose 4.2% to $3.0207 per gallon after reaching a two-year high, while gasoline futures gained 1.7% to $2.4113 per gallon. European gasoil futures increased 4.3% to $925 per metric ton after an 18% jump in the previous session.

The developments have intensified fears of a broader regional war with significant implications for global energy security and economic stability.



PUKMEDIA