Oil Prices Rise as US-Iran Tensions Escalate

Oil prices rose on Tuesday amid escalating tensions between the US and Iran following a weekend flare-up and President Donald Trump's warning of a 'hard' response.

The exchange of strikes, which included rocket launchers being hit by the US on an Iranian island in the Strait of Hormuz, raised fears of a return to major hostilities.

Trump said, 'We're going to hit them hard. There will be a response.'

US officials stated that the strikes were aimed at preventing Tehran from planting mines in the strait, while Iran targeted US forces in Jordan and the UAE.

The National Australia Bank's Rodrigo Catril noted that the situation is 'vulnerable to further escalation' due to stalled talks and the strategic importance of keeping the Strait open.