Oil prices rose nearly 3% on Tuesday to their highest level in four weeks as the United States and Iran stepped up attacks around the Strait of Hormuz, adding fresh uncertainty to global energy supplies.
Brent crude futures were last up $1.50, or 1.8%, at $84.80 a barrel by 0330 GMT, while U.S. West Texas Intermediate crude gained $1.70, or 2.2%, to $79.84. Both contracts had climbed by more than $2 earlier in the session before paring gains.
Brent had jumped 9.6% in the previous session, its biggest daily gain since May 2020, and prices are now at their highest since Washington and Tehran signed a memorandum of understanding to end the war on 17 June.
The U.S. military carried out a third consecutive night of strikes against Iran on Monday, while U.S. President Donald Trump reinstated a blockade of Iranian shipping and proposed charging a 20 per cent fee to protect traffic through the Strait of Hormuz.
"The latest escalation, including the U.S. reinstatement of the blockade and Iranian responses, has clearly injected fresh risk into the market," KCM Trade chief market analyst Tim Waterer said.
Two United Arab Emirates tankers were hit by Iranian cruise missiles in the southern lane of the Strait of Hormuz in Omani territorial waters on Monday, the UAE Ministry of Defence said. One Indian crew member was killed and eight others were wounded.
Analysts said the direction of prices would depend on whether crude and fuel tankers continue to move through Hormuz. Shipping data on Monday showed tanker transits through the strait had fallen to their lowest level in two months.
However, Iran's oil exports are continuing as usual despite the cancellation last week of a 60-day waiver of U.S. oil sanctions, oil minister Mohsen Paknejad said on his official Telegram account.
Elsewhere, Yemen's Houthi movement fired missiles at Saudi Arabia after accusing the kingdom of bombing an airport under its control on Monday.
"If the Houthis extend their attacks to Saudi's crude products in the Red Sea, it could put (further) uncertainties on crude flows from the region," Simon Wong, a portfolio manager at Gabelli Funds, said in a note.
Meanwhile, China's June crude imports slumped 41.3% to their lowest in almost a decade as refinery run rates hit a 10-year low due to weak domestic demand and export curbs on refined oil products to safeguard energy security amid the Iran war.
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Iran has begun talks with Japan about selling oil to Japanese companies, according to Iranian and Western sources. The discussions come less than a month after the U.S. eased decades-old sanctions on Iranian oil as part of efforts to secure a final peace deal with Tehran.
Donald Trump has said the U.S. will resume bombing Iran if Tehran doesn't "behave," at the sidelines of the G7 summit in France. Earlier, the U.S. President criticised Israel for its tactics against Hezbollah, saying it was unnecessary to bomb entire apartment buildings to tackle militants.
Pakistan's heavy reliance on imported energy was laid bare by the U.S.-Iran conflict, which disrupted regional supplies, drove up costs and exposed vulnerabilities in the country's energy security. However, a proposed peace agreement now offers hope for economic relief.
The 4th Shusha Global Media Forum will bring together nearly 160 media leaders, experts and officials from 54 countries in Azerbaijan's historic city of Shusha on 13-14 July, to discuss journalism’s role in peacebuilding, restoring public trust and tackling challenges.
Typhoon Bavi, the strongest storm to hit the eastern coast of mainland China this year, brought heavy rain, strong winds, flooding and landslides after making landfall in Zhejiang province on Sunday. More than 2.8 million people were evacuated to safety ahead of the storm.
President Ilham Aliyev is holding his annual question-and-answer session with international journalists at the 4th Shusha Global Media Forum in Azerbaijan.
The United States and Iran have significantly escalated their conflict, exchanging heavy missile and drone strikes across the Gulf region. Iran claims it has once again closed the Strait of Hormuz, a vital global shipping route.
Start your day informed with AnewZ Morning Brief. Here are the top news stories for the 13th of July, covering the latest developments you need to know.
China has approved fast-fashion retailer Shein's long-awaited initial public offering (IPO) in Hong Kong, clearing the way for the company to pursue a stock market listing after previous attempts in the U.S. and London failed.
European carmakers have urged the European Union to make sure new “Made in EU” rules do not put existing investments in Türkiye and Morocco at risk.
Microsoft is expected to announce a new round of job cuts as early as next week as the technology giant looks to reduce costs, according to reports.
A Swedish court has ordered Alphabet-owned Google to pay about $1.5 billion in antitrust damages to price comparison platform PriceRunner, in one of Europe's largest competition-related awards against a major technology company.
U.S. President Donald Trump earned more than $1bn from cryptocurrency-related business ventures last year, according to his mandatory 2025 financial disclosure.
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