US-Iran Conflict Keeps Oil Prices Elevated Amid Supply Concerns

Oil prices continued their upward trend for the second consecutive session on Tuesday as concerns over Middle East supply disruptions persisted. Brent crude futures rose by $1.49, or 1.4%, to reach $106.77 a barrel, while US West Texas Intermediate crude increased by $1.34, or 1.5%, to $93.94 a barrel.

The increase in oil prices can be attributed to the ongoing conflict between the US and Iran, which has raised concerns about energy supplies through the Strait of Hormuz, a critical shipping lane for oil and gas exports. Analysts say that despite signs of recovering crude exports from the region, much of this increase relies on workarounds such as ship-to-ship transfers, which are less efficient and more costly than normal operations.

KCM Trade chief analyst Tim Waterer stated that a clearer picture is emerging of higher oil export volumes leaving the Gulf, but much of that increase still relies on these workaround methods. Crude exports from major Middle Eastern producers climbed to 12.8 million barrels a day in September, the highest since February.