OIL PRICES HIT HIGHEST LEVEL IN A MONTH AFTER ATTACKS RESUME IN STRAIT OF HORMUZ

Oil prices surged to their highest level in a month on Tuesday morning, after rising more than 9 per cent in the previous session amid attacks carried out by the US and Iran, with Tehran also targeting tankers in the Strait of Hormuz.

Brent, the benchmark for two thirds of the world’s oil, was trading 4.84 per cent higher at $87.33 per barrel at 1.03pm UAE time, while West Texas Intermediate, the gauge that tracks US crude, was up 3.89 per cent at $81.18 a barrel. Both ⁠benchmarks rose sharply on Monday, with Brent jumping 9.6 per cent, marking its biggest daily gain ‌since May 2020.

Oil prices are now at their highest level since the US and Iran signed an interim deal to end the war on June 17.

Fighting has intensified in recent days, with the US saying it carried out a wave of strikes on Iranian targets on Monday. The US has reinstated its naval blockade on Iran, with President Donald Trump also saying on Monday night that he would charge vessels a 20 per cent tax to cross the strait under the watch of American forces.

Iran has continued its attacks on shipping, striking two UAE supertankers in the strait on Tuesday, killing one sailor and injuring eight. The tankers, Mombasa and Al Bahyah, both operated by Adnoc Logistics and Services, were struck by two Iranian cruise missiles in the southern part of the waterway.

"The renewed restrictions threaten Iranian crude exports after Iran had briefly restored shipments during the earlier ceasefire, while attacks involving UAE tankers and Houthi missile launches towards Saudi Arabia highlighted the risk of a broader regional conflict," said Soojin Kim, research analyst at MUFG. "The latest developments have shifted market focus from oversupply concerns to the risk of prolonged disruptions to Gulf energy exports, with the duration of US enforcement measures and the security of Hormuz now likely to determine whether oil prices remain elevated."

Tehran has said it will not uphold its commitments under the interim deal unless the US does the same.

"The path towards a lasting agreement remains fragile," said Daniela Hathorn, senior market analyst at Capital.com. However, rather than viewing the strait as simply open or closed, "investors increasingly see it as a continuum of disruption, where shipping volumes, insurance costs and operational risks can fluctuate without necessarily leading to a complete halt in global energy flows", she added.

With the flush of oil and other goods through the strait over the past weeks, supply chains should be able to buffer "what looks to be shaping up to be a more prolonged disruption than we had expected initially", said Norbert Rucker, head of economics and next generation research at Julius Baer.

"Taking last year’s tariff dispute as a guide, the US demands for Hormuz transit fees may in fact signal a willingness to engage in deal-making," he added. "Even though escalation fears are ever-present, the past months have shown that it needs a serious spike in oil prices well into the triple digits to slow the economy. Today’s oil price levels are unlikely to do much harm, even after considering the still-elevated mark-ups between crude oil and oil products."

2026-07-14T06:01:29Z