By COMFORT OGBONNA
Oil prices climbed for a third consecutive session on Tuesday as hopes for an agreement to end the Middle East conflict weakened, raising fresh concerns about disruptions to crude supplies and the continued closure of major shipping routes.
Brent crude futures rose 89 cents, or 1%, to $91.76 a barrel by 0641 GMT, extending gains from the previous session and reaching their highest level since July 30.
U.S. West Texas Intermediate crude futures gained $1.05 to $85.55 a barrel, also extending Monday’s advance and reaching their highest level since July 31.
The latest increase came as diplomatic efforts to secure a lasting end to the conflict showed little progress. Iran indicated that it could adopt a more aggressive military posture, while the United States ruled out extending a temporary ceasefire arrangement, increasing uncertainty over the future of the conflict and its potential impact on global energy supplies.
A senior Iranian official said on Monday that Tehran would move toward a fully offensive military posture if diplomatic efforts fail to produce a permanent resolution. The development added to concerns that hostilities could intensify and further threaten critical energy infrastructure and shipping routes.
The Strait of Hormuz remains at the center of the market’s concerns. The narrow waterway between Iran and Oman is one of the world’s most important energy transit routes, carrying a substantial portion of global oil and liquefied natural gas shipments.
Efforts to restore normal tanker traffic through the strait have stalled, with the number of vessels passing through the waterway remaining extremely low. The continued disruption has forced energy traders to factor a larger geopolitical risk premium into oil prices.
A projectile struck a vessel traveling out of the Strait of Hormuz on Tuesday, according to tracking information, adding to concerns about the safety of commercial shipping. Vessel crossings have remained in the single digits despite a modest increase over the weekend.
The continuing security risks have made shipping companies increasingly cautious about sending tankers through the waterway. Any prolonged reduction in traffic could place additional pressure on global crude supplies, particularly if alternative routes cannot quickly compensate for the lost capacity.
The latest developments also extend concerns beyond the Strait of Hormuz. In the Red Sea, Yemen’s Houthi movement said it had launched missiles at vessels it described as a Saudi military ship and four accompanying vessels.
The attacks add another layer of risk to international energy transportation. The Red Sea and nearby shipping routes are important corridors for the movement of oil and other commodities between the Middle East, Europe and Asia.
Markets are now closely watching whether diplomatic efforts can prevent the conflict from escalating further. A failure to reach a lasting agreement could keep oil prices elevated through the final quarter of the year and potentially into 2027.
Analysts said the absence of a durable ceasefire agreement could cause traders to maintain a higher risk premium in oil futures, particularly while tanker traffic through the Strait of Hormuz remains severely restricted.
The situation has also complicated expectations for global oil supply and demand. If disruptions continue, refiners and consumers may be forced to compete for fewer available barrels, while higher shipping and insurance costs could add further pressure to the price of delivered crude.
At the same time, the market remains sensitive to any signs of progress in negotiations. A credible agreement that restores shipping through the Strait of Hormuz could quickly reduce the geopolitical premium built into crude prices and potentially trigger a sharp decline.
For now, however, uncertainty remains dominant.
Oil traders are also monitoring developments in other major producing regions, as well as changes in refinery operations and fuel inventories. Strong demand for refined products, combined with tight diesel supplies, has already contributed to elevated refining margins and increased competition for available crude.
The recent gains in oil prices therefore reflect more than expectations about immediate production losses. They also show how concerns over shipping, insurance, refinery capacity and the security of critical energy infrastructure can influence prices even before a significant physical shortage becomes apparent.
If the conflict intensifies or tanker traffic through the Strait of Hormuz remains severely restricted, crude prices could face additional upward pressure. Conversely, a successful diplomatic breakthrough could ease concerns and bring prices lower as traders reassess the likelihood of prolonged supply disruptions.
In the near term, oil prices are expected to remain highly sensitive to developments in the conflict and the status of negotiations. With the Strait of Hormuz still operating far below normal levels, any further attack on commercial vessels or energy facilities could quickly trigger another surge in crude prices.
Market participants are consequently preparing for continued volatility, with the possibility that crude could remain within a broad range of $80 to $100 a barrel in the near term if the current uncertainty persists.
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