Oil prices moved higher in European trading on Tuesday, with Brent crude holding above $100 per barrel as concerns over supply disruptions linked to the U.S.-Israel conflict with Iran continued to dominate market sentiment.
Crude markets rebounded after a sharp 5% drop in the previous session. That decline followed reports that some vessels had managed to pass through the Strait of Hormuz, a critical route that carries around 20% of global oil supply. Despite this, the waterway remains largely restricted, and efforts by President Donald Trump to secure allied support for protecting the strait have seen limited success.
Brent crude futures rose 2.9% to $103.13 per barrel, while West Texas Intermediate (WTI) crude climbed 3.6% to $95.84 per barrel. Oil prices have surged more than 40% since late February, when the joint U.S.-Israeli military actions against Iran began.
In response, Iran has threatened to target vessels passing through the Strait of Hormuz if they are linked to the U.S. or its allies. As a result, many shipping companies have halted operations in the region due to safety concerns and difficulties securing insurance. At the same time, major oil producers in the Persian Gulf have either redirected shipments or reduced output.
Tensions escalated further after a projectile struck a tanker near the UAE port of Fujairah, causing minor damage. Additionally, officials reported that a drone attack triggered a fire at a key oil facility, intensifying fears over already tight global supply conditions.
The possibility of a prolonged conflict in Iran has raised concerns about a potential energy shock, which could increase global inflation and force central banks to reconsider their monetary policies. Reflecting these risks, the Reserve Bank of Australia raised interest rates to a 10-year high, citing significant inflation pressures linked to the conflict.
Other major central banks, including the Federal Reserve, the European Central Bank, and the Bank of Japan, are also scheduled to announce policy decisions this week, adding to market uncertainty.
Despite geopolitical risks, European equities edged higher in early trading, and Asian markets showed modest recovery. However, U.S. futures pointed lower, reflecting continued investor caution.
On the geopolitical front, President Trump has requested a delay in a planned meeting with Chinese President Xi Jinping. The request comes shortly after Trump urged China to use its influence over Iran to help reopen the Strait of Hormuz.
China, a major buyer of Iranian oil, has shown little willingness to intervene. Iranian authorities have reportedly allowed Chinese tankers to pass through the strait, while warning that other vessels could face attacks.
Meanwhile, reports have emerged that Iranian officials, including senior security figure Ali Larijani and Basij commander Gholamreza Soleimani, may have been killed in recent airstrikes. However, there has been no official confirmation from Iranian authorities.
