JD - Oil prices climbed for a third consecutive session on Tuesday, fueled by growing concerns over potential supply disruptions in the Middle East amid escalating tensions involving Iran.
Brent crude futures rose to $78.83 a barrel, a gain of $1.10, or 1.4%. During the previous session, the contract had surged to $82.37, its highest level since January, before paring some gains to close up 6.7%.
U.S. West Texas Intermediate (WTI) crude also advanced, increasing by 74 cents, or 1%, to $71.97 per barrel. Similarly, the U.S. benchmark had initially reached its highest point since June in the prior session before retreating slightly to finish 6.3% higher.
The rise in prices reflects market anxieties over the security of shipments through the Strait of Hormuz, a critical chokepoint for global oil supplies. Tankers and container ships are reportedly avoiding the waterway after insurance companies canceled war risk coverage for vessels.
Concerns about transit through the Strait intensified after Iranian media quoted a senior Revolutionary Guards official on Monday as saying that the Strait of Hormuz was closed and that Iran would fire on any ship attempting to pass through.
The escalating situation follows reported attacks that have heightened tensions in the region.
Normally, the Strait of Hormuz sees the passage of ships carrying about one-fifth of global oil demand, along with tankers transporting diesel, gasoline, and other fuels to major Asian markets, including China and India. The waterway is also a conduit for approximately 20% of the world's liquefied natural gas (LNG).
Analysts anticipate that oil prices will remain elevated in the coming days, as markets closely monitor the impact of the escalating conflict in the Middle East.
