BY COMFORT OGBONNA
Oil prices continued their upward surge on Tuesday as geopolitical tensions escalated in the Middle East ahead of a U.S.-imposed deadline demanding that Iran reopen the Strait of Hormuz to global shipping. The warning from U.S. President Donald Trump, who threatened military action against Iranian infrastructure if the waterway remains closed, has heightened fears of a prolonged disruption to global energy supplies.
Brent crude futures rose by $1.44, or 1.3%, reaching $111.21 per barrel by 0700 GMT. Meanwhile, U.S. West Texas Intermediate crude climbed even more sharply, gaining $2.32, or 2.1%, to trade at $114.73 per barrel. The price increases reflect growing concerns among traders and investors that the escalating conflict could significantly restrict oil flows from the Persian Gulf, one of the world’s most vital energy corridors.
Trump has warned that Iran could face severe military strikes if it fails to comply with the U.S. demand to reopen the strait by 8 p.m. EDT on Tuesday (0000 GMT Wednesday). The narrow waterway handles roughly one-fifth of the world’s global oil shipments, making it one of the most critical chokepoints for international energy markets. Any sustained disruption to traffic through the strait has the potential to ripple across global supply chains and trigger sharp increases in fuel prices worldwide.
Diplomatic efforts to defuse the situation appear to be faltering. Iran rejected a ceasefire proposal that had been delivered through Pakistan acting as a mediator. Iranian officials insisted that only a permanent end to the broader conflict would be acceptable, pushing back against international pressure to restore shipping access through the strategic waterway.
Market analysts say the uncertainty surrounding the crisis has kept oil prices firmly supported. Priyanka Sachdeva, a senior market analyst at Phillip Nova, said the market is reacting to the growing possibility that damage to key energy infrastructure could have lasting consequences.
According to Sachdeva, the risks to oil supply are no longer theoretical, as attacks on energy and shipping assets in the region have already been reported. Even if hostilities were to end soon, she noted that damaged facilities and disrupted transport routes could take months to restore, potentially removing large volumes of oil from global markets for an extended period.
Several Gulf producers have already seen their exports sharply reduced as restrictions on shipping through the Strait of Hormuz tighten. Iranian forces effectively shut down traffic through the waterway after U.S. and Israeli attacks began on February 28, further complicating the region’s already fragile security situation.
Tim Waterer, chief market analyst at KCM Trade, said the oil market is now closely watching the countdown to Trump’s ultimatum. He explained that traders are paying as much attention to the approaching deadline as they are to traditional supply and demand fundamentals.
Waterer added that the possibility of a ceasefire agreement could still trigger a sharp drop in oil prices if it gains momentum. However, ongoing worries about supply disruptions from the Hormuz chokepoint, combined with damage to energy infrastructure across the region, are preventing prices from falling significantly.
International diplomatic efforts are continuing as well. The United Nations Security Council is expected to vote on a resolution aimed at protecting commercial shipping in the Strait of Hormuz. However, diplomats say the proposal has been significantly weakened after China opposed any measures that would authorize the use of force to secure the shipping lane.
Meanwhile, the conflict continues to spread across the broader region. Syrian state television reported explosions in the capital city of Damascus and nearby areas on Tuesday, which were attributed to Israeli defense systems intercepting Iranian missiles. Saudi Arabia also reported that its air defenses intercepted and destroyed seven ballistic missiles launched toward its Eastern Province, with debris falling near major energy facilities.
The broader conflict has further tightened global oil supply, with refiners in Asia and Europe scrambling to secure alternative shipments as flows from the Middle East remain disrupted. Spot premiums for U.S. West Texas Intermediate crude have surged to record highs as buyers compete for limited supplies.
Saudi Arabia’s state oil giant Aramco also raised its official selling price for Arab Light crude delivered to Asia in May. The new price represents a record premium of $19.50 per barrel above the Oman/Dubai benchmark, highlighting the intense demand from refiners seeking reliable supplies.
Additional supply concerns emerged when Russia reported that Ukrainian drones had attacked the Caspian Pipeline Consortium’s terminal on the Black Sea. The facility handles about 1.5% of global oil supply, and Russian authorities said the attack damaged key loading infrastructure and storage tanks.
Despite the tightening market, the OPEC+ alliance announced on Sunday that it would increase oil production quotas by 206,000 barrels per day in May. However, analysts say the increase may have little practical impact, as several key members are currently unable to boost exports due to shipping disruptions and infrastructure damage linked to the Strait of Hormuz crisis.