Oil Prices Surge as US-Iran Conflict Escalates Again

Oil prices surged on Tuesday as renewed fighting between the US and Iran in the Middle East raised concerns about supply disruptions from the key crude-producing region. Brent crude futures rose $1.05, or 1.2%, to $91.54 a barrel at 0455 GMT, while US West Texas Intermediate crude was up $1.27, or 1.5%, to $87.03.

The latest developments in the conflict have brought back the risk of damage to energy infrastructure around the Gulf and added uncertainty for shipping through the Strait of Hormuz, which carried about a fifth of global oil supplies before the war erupted in late February. Iran shut the waterway after the US and Israel attacked the country on February 28.

The UK Maritime Trade Operations agency reported that a tanker was struck by three projectiles while sailing out of the Strait of Hormuz, although no casualties or environmental impacts were reported. Despite this, oil flowing through Hormuz is around 6 million barrels per day, well below pre-conflict levels, according to satellite tracking firms.

Analysts at ANZ noted that the global oil market has been relying on buffers that are becoming exhausted, with US inventories nearing minimum levels and China's ability to keep imports low being tested as seasonal demand picks up.