Oil prices moved higher on Tuesday after a tanker traveling through the Strait of Hormuz was struck by an unidentified projectile, according to the United Kingdom Maritime Trade Operations agency.
The UKMTO said the vessel is believed to have suffered structural damage. However, no casualties or environmental damage have been reported.
Ships passing through the strait were advised to proceed with caution.
Brent and WTI Crude Move Higher
By 10:12 ET, Brent crude futures, the global oil benchmark, rose 2.7% to $73.93 per barrel.
U.S. West Texas Intermediate crude futures also gained 2.5% to $70.29 per barrel.
The move showed renewed concern in energy markets over security in one of the world’s most important oil shipping routes.
UKMTO Reports Tanker Fire Near Oman
Earlier, the UKMTO said it received a report from a tanker sailing south near the coast of Oman.
The vessel was reportedly hit by an unidentified projectile, which caused a fire on board.
Iran has not officially claimed responsibility for the attack. However, anonymous sources quoted by Iranian state television suggested the strike targeted a tanker carrying natural gas from Qatar.
Axios Reports Iranian Missile Strikes
Axios also reported that Iran’s military fired at least two missiles at commercial vessels crossing the Strait of Hormuz on Monday night.
The report cited two U.S. officials and said the strikes ended a week-long pause in attacks under a U.S.-Iran understanding.
According to Axios, the United States is likely to respond with strikes against Iranian targets.
Strait of Hormuz Tensions Remain High
Iran has previously said that ships crossing the Strait of Hormuz must use routes approved by Tehran.
It has also warned that any U.S. interference would be met with rapid and decisive action.
The reported attacks came after a one-week agreement between Washington and Tehran to suspend strikes in the strait expired.
Axios said the incidents could put a memorandum of understanding signed less than three weeks ago at risk of collapse.
Oil Prices Had Fallen After Interim Peace Deal
Crude prices had pulled back since the interim peace deal was signed in June.
After the conflict began in late February, oil prices surged and briefly moved above $110 per barrel. That rally sparked fears of another global inflation shock.
More recently, data suggested that shipping flows were beginning to return through the Strait of Hormuz. However, it remains unclear whether traffic has fully recovered.
Hormuz Control Becomes Key Peace Issue
The Strait of Hormuz remains a major point of tension in peace negotiations.
Alongside Iran’s nuclear program and fighting between Israel and Tehran-backed Hezbollah militants in Lebanon, control of the strait has become a central issue.
Iran has demanded that it retain some control over the waterway, which is a vital chokepoint for global shipping. The United States has rejected those demands.
Analysts at Deutsche Bank said oil prices have returned to pre-conflict levels, even though traffic through the Strait of Hormuz remains limited.
They warned that supply-chain stress is still present.
Higher Oil Supply Limits Price Gains
The increase in oil prices was partly limited by expectations of higher global supply.
OPEC+ agreed on Sunday to raise production targets by 188,000 barrels per day from August. The group had already approved similar increases for June and July.
The United Arab Emirates also said it increased crude production by more than 3.8 million barrels per day in June. That lifted output above levels seen before the start of the Iran war.
Saudi Aramco Cuts Asia Crude Price
Saudi Aramco also lowered the August official selling price of its flagship Arab Light crude for Asian buyers.
The price was cut to a discount against the regional benchmark for the first time since 2020.
The move highlights growing competition for market share as Gulf oil exports recover.
