Brent crude oil futures on Tuesday saw their biggest monthly gain amid high trading volatility, as investors assessed the likelihood of US President Donald Trump ending the war with Iran amid supply shocks caused by the prolonged closure of the Strait of Hormuz, UNN reports with reference to Reuters.
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Brent crude oil futures for May delivery, which expire on Tuesday, rose by $2.22, or 1.97%, to $115 per barrel at 09:59 GMT (12:59 Kyiv time). The more active June contract traded 64 cents, or 0.6%, higher at $108.03 per barrel. US West Texas Intermediate crude oil futures for May delivery rose by $1.35, or 1.31%, to $104.23.
According to LSEG data covering the period since June 1988, Brent crude oil futures for next-month delivery were set to show a record monthly gain of 59%. WTI crude oil futures rose by 56%, the biggest jump since May 2020.
Tuesday's session was volatile, with Brent crude oil futures for next-month delivery fluctuating between a 2.5% gain and a 1.3% loss compared to Monday's close.
Trump has told aides he is prepared to end the military campaign against Iran even if the Strait of Hormuz remains largely closed, postponing its reopening until a later date, The Wall Street Journal reported on Monday, citing administration officials.
Trump ready to end war with Iran even without opening the Strait of Hormuz – media31.03.26, 07:54
The US President had warned that the US would "destroy" Iranian energy facilities and oil wells if Tehran did not open the waterway.
Trump threatens to "completely" destroy Iran's energy resources if no deal is reached30.03.26, 16:01
"While diplomatic signals remain contradictory, the real situation indicates continued uncertainty," said Sugandha Sachdeva, founder of New Delhi-based research firm SS WealthStreet. "Even with de-escalation, rebuilding damaged infrastructure will take time, leading to supply shortages."
Highlighting the threat to maritime energy supplies, Kuwait Petroleum Corp on Tuesday reported that its fully loaded tanker "Al-Salmi," capable of carrying up to 2 million barrels of oil, suffered a suspected attack by Iran in the port of Dubai. Officials also warned of the risk of an oil spill in the area.
Iranian UAV attacked an oil tanker in Dubai port31.03.26, 10:04
On Saturday, Iranian-backed Houthis in Yemen fired missiles at Israel, raising fears of a possible disruption to the Bab el-Mandeb Strait, a choke point connecting the Red Sea and the Gulf of Aden for ships traveling between Asia and Europe via the Suez Canal.
According to Kpler, Saudi Arabia has rerouted its oil exports from the Persian Gulf through this strait: about 4.658 million barrels per day are arriving at the port of Yanbu on the Red Sea, compared to an average of 770,000 barrels per day in January and February.
"As the remaining oil market reserves are gradually depleted, the market's vulnerability to a prolonged closure of the Strait of Hormuz means that we are approaching a physical oil shortage on a broader geographical scale, and the upward momentum in oil prices is likely to continue to intensify," said Lin Ye, Vice President of Commodity Markets and Oil at Rystad Energy.
Trump's team is studying what a jump in oil prices to $200 would mean - Bloomberg26.03.26, 12:43