Oil Prices Ease After Sharp Rally in Asian Trading
Oil prices moved lower in Asian trading on Tuesday, following a strong surge in the previous session. Investors are now balancing rising geopolitical tensions in the Gulf with U.S. efforts to stabilise shipping through the Strait of Hormuz.
Brent crude futures for July delivery slipped 0.3% to $114.05 per barrel, while West Texas Intermediate (WTI) crude declined 1.2% to $105.06 per barrel.
Previous Session Driven by Geopolitical Surge
In the prior session, oil markets saw significant gains. Brent crude rose more than 4%, while WTI climbed approximately 6%, driven by escalating conflict between the United States and Iran.
The rally was fueled by attacks targeting energy infrastructure and vessels passing through the Strait of Hormuz, raising concerns about global supply disruptions.
Renewed U.S.-Iran Clashes Weigh on Market Sentiment
Market sentiment remains fragile following fresh military exchanges in the Gulf. Both U.S. and Iranian forces launched new attacks as they sought to assert control over the key shipping route.
This escalation effectively ended a fragile ceasefire and increased fears of prolonged disruptions to oil supply.
Tensions intensified further after reports that Iranian strikes targeted infrastructure in the United Arab Emirates, including a major oil facility at Fujairah port.
Analysts at ING Group noted that renewed tensions have pushed oil and gas prices higher, as markets reassess the duration and impact of potential supply disruptions.
Diplomatic Efforts Continue Amid Rising Risks
Iranian Foreign Minister Seyed Araghchi stated that military action would not resolve the crisis, while also indicating that diplomatic talks mediated by Pakistan are making progress.
Despite these developments, uncertainty remains high, and markets continue to react cautiously to any escalation in the region.
Donald Trump Launches “Project Freedom”
The United States has introduced “Project Freedom,” an initiative aimed at assisting vessels stranded in the Gulf and restoring partial shipping flows through the Strait of Hormuz.
U.S. forces have already begun escorting commercial ships through safer routes, attempting to stabilise maritime traffic and reduce supply disruptions.
However, analysts caution that any relief may be temporary, as inbound shipping activity into the Persian Gulf remains limited.
