Oil prices extended gains for a second straight session as fresh hostilities between the US and Iran revived concerns over prolonged disruptions to crude and refined-product flows through the Strait of Hormuz.
Brent crude traded around $91 a barrel, while West Texas Intermediate was above $86, after WTI surged 2.8% on Monday in its biggest one-day gain in three weeks.
US forces struck an island in the Strait of Hormuz, while Iran retaliated with attacks targeting the United Arab Emirates and Jordan, marking the first direct exchange of fire between the sides in about a month. Iranian missiles aimed at US air bases in Jordan were reportedly intercepted. US President Donald Trump has warned that Washington would respond to attacks on American forces, raising fears that renewed hostilities could trigger another cycle of escalation.
The Strait of Hormuz remains central to the oil market outlook. While crude exports are still moving through the waterway, some tankers are reportedly switching off their transponders to avoid detection. Persian Gulf producers including the UAE, Saudi Arabia, Kuwait and Iraq continue to get some barrels out, but shipping remains exposed to military risks.
A tanker was reportedly struck by three unidentified projectiles while travelling outbound through Hormuz near Oman, according to the UK Maritime Trade Operations, highlighting the continuing threat facing vessels.
“There are no signs that normal transit through the Strait of Hormuz will resume in the near term,” said Bart Melek, global head of commodity strategy at TD Securities, adding that crude prices could move higher.
The latest escalation comes after a volatile August in which crude prices were buffeted by stop-start diplomatic efforts to end the conflict. Refined products, particularly diesel, have seen even sharper price gains as supplies tighten.
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