Oil prices extend gains on Tuesday
Oil prices extended gains on Tuesday as escalating tensions between the United States and Iran raised concerns over supply disruptions through the Strait of Hormuz, a critical route for about a fifth of global oil shipments.
Brent crude futures rose $1.44, or 1.3 per cent, to $111.21 a barrel by 0700 GMT, while US West Texas Intermediate crude gained $2.32, or 2.1 per cent, to $114.73.
US President Donald Trump threatened military action against Iran if it fails to meet a Tuesday deadline to reopen the strait, warning of potential strikes on key infrastructure. Tehran rejected a US-backed ceasefire proposal mediated by Pakistan, insisting on a permanent end to the conflict and resisting pressure to resume shipping flows.
The standoff has heightened market anxiety, with analysts noting that continued attacks on energy and shipping assets could disrupt supply for months. Iranian forces have effectively shut the strait since late February following U. and Israeli strikes, leading to a collapse in exports from several Gulf producers.
The United Nations Security Council is expected to vote on a resolution to protect commercial shipping in the waterway, although diplomatic divisions have weakened the proposal.
Regional tensions remained elevated, with Saudi Arabia reporting the interception of ballistic missiles targeting its Eastern Region, and explosions reported in Damascus following Israeli interception of Iranian missiles.
Supply concerns have driven spot premiums for US crude to record highs, while Saudi Aramco raised the official selling price of its Arab Light crude to Asia for May delivery to a record premium of $19.50 per barrel above the Oman/Dubai average.
Further pressure came after Russia reported damage to infrastructure at the Caspian Pipeline Consortium terminal on the Black Sea following a drone attack, affecting a route that handles about 1.5 per cent of global supply.
Meanwhile, the OPEC+ alliance agreed to raise output quotas by 206,000 barrels per day in May, although the increase is expected to have limited impact as ongoing disruptions continue to restrict exports.
Attribution: Reuters