US-Iran Truce Expires, Oil Prices Surge Amid Escalating Tensions
Oil prices rose on Tuesday as the US-Iran truce expired and tensions between the two countries escalated. Brent crude futures climbed to $91.14, their highest since July 30, after rising by 27 cents or 0.3%. US West Texas Intermediate crude futures were up 42 cents to $85.04 a barrel.
Iran said it will adopt a more aggressive military posture due to stalled negotiations for a permanent end to the war with the US. The country's senior official told Reuters that Iran would shift to a 'fully offensive' stance, heightening worries about energy supply.
The conflict has been ongoing since February 28 when the US and Israel launched attacks on Iran. Oil tanker traffic through the strategic Strait of Hormuz remains at a trickle, with only five vessels transiting the strait on Saturday compared to 31 in the previous weekend.
KCM's chief market analyst, Tim Waterer, said that oil has jumped due to shaky US-Iran relations and the lack of progress towards reopening the Strait of Hormuz. He noted that the dual chokehold on the Strait of Hormuz and the Bab el-Mandeb remains highly significant.