Brent crude rises as Strait of Hormuz tensions persist

Brent crude oil prices edged higher in early trading on Tuesday, with December delivery contracts reaching $100.89 per barrel, a gain of just over half a percent. The increase followed a late evening rebound after prices came under pressure earlier in the day.

Tensions in the Strait of Hormuz continue to influence oil markets. The UK Maritime Trade Operations (UKMTO) reported another tanker attack, while Iran’s Revolutionary Guard ordered a ship to turn back or face retaliation. Despite these risks, oil-producing countries like Kuwait and Iraq are boosting shipments through the strait, with Kuwait now producing 75% of its pre-war output.

Meanwhile, Saudi Aramco slashed the price of its Arab Light crude for Asian customers to a six-year low, aiming to capture market share. Analysts note that while supply increases and Saudi price cuts have weighed on prices, geopolitical risks, such as fighting in Yemen and threats of further attacks, are preventing significant declines. According to Naohiro Niimura of Market Risk Advisory, long-term price drops remain uncertain due to persistent supply concerns.

Brent crude has surged about 65% since the start of the year, driven by disruptions from the U.S. and Israel’s February attack on Iran. Later today, the U.S. Energy Information Administration (EIA) will release its short-term energy outlook, which could provide further clarity on market trends.