Oil Prices Surge on Renewed US-Iran Tensions

Oil prices surged by around 2% on Tuesday as tensions between the United States and Iran escalated, sparking fears of supply disruptions from the world's key crude-producing region.

Brent crude futures rose to US$92.21 a barrel, up US$1.72 or 1.9%, while U.S. West Texas Intermediate crude increased to US$87.88, a gain of US$2.12 or 2.47%.

The renewed conflict between the two nations led to concerns about prolonged disruptions to energy flows through the Strait of Hormuz, which carried about a fifth of global oil supplies before the war erupted in late February.

Saxo Bank analyst Ole Hansen said that fresh hostilities raised worries about supply not being disrupted more than it already is, and that a lack of follow-through buying suggests the market is betting on this scenario.