Oil Rises As Expanding Amid Middle East Tensions, Strait Of Hormuz Supply Risks

Oil prices climbed sharply for a third consecutive day on Tuesday as the intensifying US.-Israeli conflict with Iran and threats to Shipping through the Strait of Hormuz, stoked concerns over disruptions to global energy supplies.

Brent crude futures rose $3.15, or 4.1%, to $80.89 a barrel by 0745 GMT, following a peak of $82.37 on Monday, its highest level since January 2025, before easing slightly to close 6.7% higher. U.S. West Texas Intermediate (WTI) crude gained $2.55, or 3.6%, reaching $73.78 a barrel, after also touching a multi-month high in the previous session.

According to a report, Analysts warned that continued escalation in the Middle East could drive prices even higher. “With no immediate de-escalation, the Strait of Hormuz is effectively closed, and Iran has shown readiness to target energy infrastructure. Risks rise the longer the conflict continues,

The conflict intensified on Monday with Israel striking targets in Lebanon, while Iran retaliated with missile and drone attacks on energy facilities in Gulf nations and tankers navigating the Strait of Hormuz. Insurance providers have suspended coverage for vessels transiting the waterway, prompting many tankers and container ships to avoid the region. The Strait accounts for roughly 20% of global oil and liquefied natural gas shipments.

“Markets are closely watching the potential for further disruption in Middle East oil flows, and any additional attacks on infrastructure could prolong outages,” noted analysts at ING. Israeli Prime Minister Benjamin Netanyahu cautioned that while the U.S.-Israel operations may take some time, they are not expected to last for years.

Refined fuel markets have also reacted sharply. U.S. ultra-low-sulfur diesel futures rose 8.3% to $3.1404 per gallon, reaching a two-year high, while gasoline futures increased 3.8% to $2.4620 per gallon. Saudi Arabia temporarily shut its largest domestic refinery after a drone strike, further tightening regional fuel supply.

In response to the crisis, Bernstein has raised its 2026 Brent price estimate from $65 to $80 per barrel, projecting a potential surge to $120-$150 in the event of prolonged conflict.

Also Read: Global Oil Markets on Edge as Strait of Hormuz Faces Potential Closure