Crude oil prices climbed about 2% on Tuesday, reaching their highest level in a month as escalating military tensions between the United States and Iran fueled fears of supply disruptions through the strategically vital Strait of Hormuz.
Brent crude futures rose $1.68, or 2%, to $84.98 a barrel, while US West Texas Intermediate (WTI) crude gained $1.65, or 2.1%, to $79.79 a barrel. Brent had already surged 9.6% in the previous session, marking its biggest single-day gain since May 2020.
The rally followed the US decision to reinstate its naval blockade of Iran. The Joint Maritime Information Center said the blockade of Iranian ports and coastal areas would begin at 4 p.m. EDT.
President Donald Trump said countries benefiting from security in the Strait of Hormuz should share the costs of the operation.
Tehran said its June 17 agreement with Washington had entered a “crisis phase” and refused to honor the deal, accusing the United States of violating its commitments. Iran also rejected Trump’s proposal to impose tolls on commercial vessels transiting the strait.
Analysts said the renewed tensions have reignited concerns over oil supplies from the Persian Gulf. During a temporary easing of restrictions, Iran exported at least 57 million barrels of crude oil.
Meanwhile, the United Arab Emirates increased production to 3.8 million barrels per day in June, while the United States is also expected to back fresh sanctions targeting buyers of Russian oil and gas.
