Oil prices moved sharply higher during Asian trading on Tuesday, with Brent crude holding above the $100 per barrel level as concerns over supply disruptions linked to the U.S.-Israel-Iran conflict continued to weigh on markets.
Prices rebounded after a roughly 5% decline in the previous session, supported by reports that some vessels had managed to pass through the Strait of Hormuz. However, the key shipping route remains largely restricted, while U.S. efforts to secure allied support for safeguarding the passage have seen limited response.
Brent crude futures climbed 2.8% to $103.01 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.6% to $95.54 per barrel in early trading.
The geopolitical situation remains tense, with the conflict between the U.S., Israel, and Iran entering its third week without signs of de-escalation. Iran has warned it could target U.S.-linked infrastructure in the region following recent strikes on Kharg Island, one of its main oil export terminals.
Overnight, Iran and Israel exchanged further attacks, including drone and missile strikes. Reports also indicated that a U.S. embassy in Baghdad was targeted amid the escalating tensions.
U.S. President Donald Trump recently called on several countries, including China, to assist in reopening the Strait of Hormuz. However, many allies have shown reluctance to intervene, leaving the situation unresolved.
The Strait of Hormuz remains a critical chokepoint for global energy markets, accounting for roughly 20% of worldwide oil supply. While some tankers from countries such as India and Pakistan have reportedly passed through, Iran has signaled that it may allow limited transit while targeting vessels associated with the U.S. and its allies.
Since the outbreak of the conflict, oil prices have surged amid expectations of prolonged supply disruptions. Many Asian economies, heavily reliant on oil imports through Hormuz, remain particularly vulnerable to these developments.
Rising energy costs have also heightened inflation concerns globally, increasing the likelihood that central banks may adopt more hawkish monetary policies. This comes as several major institutions, including the Federal Reserve, the European Central Bank, and the Bank of Japan, prepare to announce policy decisions later this week.
