Middle East Tensions Send Oil Prices Soaring Amid Supply Disruption Fears

Oil prices surged by around $1 on Tuesday as tensions in the Middle East escalated following renewed fighting between the US and Iran. The conflict has raised concerns about supply disruptions from the world's key crude-producing region.

Brent crude futures rose to $91.54 a barrel, up $1.05 or 1.2%, while US West Texas Intermediate crude gained $1.27 or 1.5% to $87.03. The previous day saw Brent close up 2.7% and WTI settle up 2.8%.

US President Donald Trump's threat of further strikes against Iran on Monday, following the first exchange of direct attacks between the countries in a month, has heightened tensions. Tim Waterer, chief market analyst at KCM, said this 'brings the potential for Iranian retaliation back into the equation' and raises the prospect of damage to energy infrastructure around the Gulf.

Despite efforts by mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz, which carried about a fifth of global oil supplies before the war erupted in late February, no progress has been made. Iran shut the waterway after the US and Israel attacked the country on February 28.