Oil prices held on to strong gains after rising nearly 4% in the previous session, as the conflict in the Middle East showed little sign of easing and new evidence pointed to mounting pressure on Iran's crude exports. Brent crude traded near $107 a barrel, while West Texas Intermediate hovered around $102. The market remains focused on the Strait of Hormuz, the critical waterway through which roughly a fifth of global oil supply typically flows.
Satellite imagery indicated there were no ocean-going tankers at Iran's Kharg Island over the past several days, marking the first prolonged halt at the country's main export terminal since hostilities began more than 10 weeks ago. The development suggests the US naval blockade is beginning to bite more deeply into Tehran's oil shipments.
US President Donald Trump sought to play down the geopolitical crisis ahead of his meeting with Xi Jinping in Beijing, saying trade would dominate the agenda and that “we have Iran very much under control.”
Yet the conflict is increasingly becoming a domestic political challenge for the White House. Data released on Tuesday showed US gasoline prices have climbed to their highest levels since 2022, reviving inflation concerns at a sensitive time ahead of November's midterm elections.
The Strait of Hormuz has been effectively shut for more than two months, while Washington's mid-April blockade of Iranian ports has added another layer of complexity to efforts to negotiate a ceasefire.
The disruption has forced major importers to rethink supply strategies. Japan, which traditionally sources around 90% of its crude from the Middle East, has begun securing alternative cargoes, including a rare purchase of Mexican crude — its first such deal since 2023.
The strain is spreading across Asia. Vietnam's state oil company has appealed to Washington to allow a supertanker carrying crude to pass through the US naval cordon near the Persian Gulf, warning that the shipment is essential to the country's energy security.
While crude prices remain elevated, trading activity has eased from the frenetic pace seen earlier this month. Average daily Brent volumes have slipped to around 920,000 contracts this week, down sharply from peaks of nearly 1.9 million contracts recorded in mid-May.
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