Iran-US Tensions Drive Oil Prices Higher Amid Supply Disruption Fears

Oil prices rose on Tuesday as tensions between the US and Iran escalated in the Middle East. The resumption of fighting between the two countries has renewed fears of supply disruptions from the world's key crude-producing region.

Brent crude futures were up 66 cents, or 0.7%, to $91.15 a barrel at 0640 GMT, while US West Texas Intermediate crude was up 70 cents, or 0.8%, to $86.46. The prices had already increased in the previous session, with Brent closing up 2.7% and WTI settling up 2.8%

According to Tim Waterer, chief market analyst at KCM, the recent fighting brings the potential for Iranian retaliation back into the equation. This raises the prospect of damage to energy infrastructure around the Gulf and adds fresh uncertainty for shipping through the Strait of Hormuz.

The number of visible commodity vessels transiting the Strait of Hormuz held at five per day, below the 10-day average of around 14, shipping data from Kpler showed. None of the five ships were liquid tankers. The UK Maritime Trade Operations agency (UKMTO) reported that a tanker was struck by three projectiles while sailing out of the Strait of Hormuz.