Iran-US Tensions Send Oil Prices Soaring
Global oil prices surged nearly 4% on Tuesday, reaching their highest levels in about a week, as renewed fighting between the US and Iran intensified concerns over potential disruptions to Middle Eastern oil supplies.
The Brent crude futures rose $3.44, or 3.8%, to $93.93 a barrel, while US West Texas Intermediate (WTI) crude gained $3.72, or 4.3%, to $89.48, putting them on track for their highest close since August 20 and July 23, respectively.
The price jump follows the latest exchange of attacks between Washington and Tehran, along with reports that two tankers were hit while leaving the Strait of Hormuz, a critical global oil transit route that Iran has effectively closed to shipping. The United States launched fresh air strikes against Iranian targets on Tuesday, ending hopes that last weekend's exchange of attacks might not lead to a broader escalation of the conflict.
The conflict is also disrupting refinery operations, particularly in the Middle East, while Ukrainian attacks have affected refining capacity in Russia. The disruptions have pushed diesel prices sharply higher, with US diesel futures climbing to around a 52-month high on Tuesday after surging about 51% over the past 10 weeks.