Hormuz Tensions Fuel Oil Price Surge as Supply Fears Escalate
Oil prices surged on Tuesday to their highest level since late July as escalating tensions in the Strait of Hormuz and stalled US-Iran talks fueled supply fears.
Brent crude climbed above $91 a barrel, while West Texas Intermediate approached $85 after touching $85.37 earlier in the session.
The latest move is driven by the deteriorating security picture around two crucial global shipping routes, with Iran warning of a more aggressive military posture and the US ruling out extending the temporary ceasefire arrangement.
Shipping data shows only six commodity vessels crossed Hormuz on Monday, well below the recent 10-day average of 11, while no very large crude carriers or LNG tankers were recorded passing through the strait.
KCM Trade analyst Tim Waterer views the lack of progress between Washington and Tehran, combined with limited shipping activity, as keeping a significant supply premium embedded in crude.