BY COMFORT OGBONNA
Brent crude rose more than $3 on Tuesday, marking a third consecutive day of gains, as the widening U.S.-Israeli conflict with Iran and threats to shipping through the Strait of Hormuz stoked fears of supply disruptions from the key Middle East producing region.
Brent futures were trading at $80.89 a barrel, up $3.15, or 4.1%, by 0745 GMT. On Monday, the contract briefly reached $82.37, its highest level since January 2025, before paring gains to settle 6.7% higher. U.S. West Texas Intermediate (WTI) crude climbed $2.55, or 3.6%, to $73.78 a barrel, after reaching its highest point since June 2025 in the previous session before settling up 6.3%.
“With no quick de-escalation in sight, the Strait of Hormuz is effectively closed, and Iran has demonstrated a willingness to target energy infrastructure in the region. Upside risks remain, and they grow the longer the conflict drags on,” said Tony Sycamore, market analyst at IG.
The U.S. and Israeli air campaign against Iran expanded on Monday, with Israel striking targets in Lebanon and Iran retaliating with attacks on energy infrastructure across Gulf countries and tankers in the Strait of Hormuz. Shipping companies are avoiding the waterway as insurers withdraw coverage, while global oil and gas shipping rates have surged. Concerns intensified after Iranian media reported that a senior Revolutionary Guards official declared the Strait of Hormuz closed and warned that any vessel attempting passage would be fired upon. About 20% of the world’s oil and liquefied natural gas flows through this critical chokepoint.
“The market continues to digest the risk of escalation in the Middle East,” said analysts at ING. “While concerns about oil flows through the Strait of Hormuz are significant, a greater risk would be Iran targeting additional energy infrastructure, which could cause prolonged outages and sustained price spikes.”
Israeli Prime Minister Benjamin Netanyahu said on Monday that the U.S. and Israel’s military campaign may take “some time” but is not expected to last for years. Analysts now expect oil prices to remain elevated in the coming days as markets react to the intensifying conflict. Bernstein raised its 2026 Brent oil price forecast to $80 a barrel from $65, noting that prices could spike to $120-$150 in the event of a prolonged conflict.
Refined fuel futures also surged, reflecting the risk to processing facilities in the Middle East. Saudi Arabia shut its largest domestic refinery on Monday following a drone strike. U.S. ultra-low-sulfur diesel futures jumped 8.3% to $3.1404 per gallon after hitting a two-year high on Monday, while gasoline futures gained 3.8% to $2.4620 per gallon. European gasoil futures rose 9.2% to $967.75 per metric ton after climbing 18% the previous day.
The escalating tensions and disruptions to global oil supply have underscored the sensitivity of energy markets to geopolitical risk, highlighting how conflicts in the Gulf region can quickly ripple through global energy prices and refined fuel markets.
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