The price of Brent crude oil rose by more than $3 on Tuesday, showing growth for the third consecutive day, as the escalation of the US-Israeli conflict with Iran and threats to shipping through the Strait of Hormuz heighten fears of supply disruptions from the key oil-producing region in the Middle East, UNN reports, citing Reuters.
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Brent crude futures traded at $80.89 per barrel by 07:45 GMT (09:45 Kyiv time), up $3.15, or 4.1%. On Monday, the contract price jumped to $82.37, reaching its highest level since January 2025, although it later declined and closed 6.7% higher.
US West Texas Intermediate crude rose by $2.55, or 3.6%, to $73.78 per barrel. In the previous trading session, the contract initially rose to its highest level since June 2025, then declined, rising by 6.3%.
"In the absence of rapid de-escalation, the de facto closure of the Strait of Hormuz, and Iran's willingness to strike energy infrastructure in the region, upside risks remain and are increasing as the conflict drags on," said Tony Sycamore, IG market analyst, in his note.
On Monday, the US and Israeli air war against Iran expanded, with Israel attacking Lebanon and Iran responding with strikes on Gulf energy infrastructure and tankers in the Strait of Hormuz.
Tankers and container ships are also avoiding this waterway as insurance companies have canceled coverage for vessels, while global oil and gas shipping rates have soared. Fears about passage through the waterway intensified after Iranian media reported on Monday that a senior official of Iran's Islamic Revolutionary Guard Corps announced the closure of the Strait of Hormuz and warned that Iran would open fire on any vessel attempting to pass.
Approximately 20% of the world's oil and gas passes through the Strait of Hormuz.
"The market continues to price in the risk of escalation in the Middle East," ING analysts said in a note published on Tuesday.
"While there are concerns about oil supplies through the Strait of Hormuz, the greater risk to the market is Iran striking additional energy infrastructure in the region. This could lead to longer oil supply disruptions," analysts note.
Israeli Prime Minister Benjamin Netanyahu said on Monday that the US-Israeli war against Iran could take some time, but not years.
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Analysts expect oil prices to remain high in the coming day as markets focus on the implications of the escalating conflict in the Middle East.
On Monday, Bernstein raised its 2026 Brent crude price forecast to $80 per barrel from $65, but predicts that in the extreme case of a prolonged conflict, prices will reach $120-150.
Refined product futures are also rising as the Middle East is a key fuel supplier and its refining facilities are under threat. On Monday, Saudi Arabia closed its largest oil refinery after a drone strike.
US ultra-low sulfur diesel futures rose 8.3% to $3.1404 per gallon after reaching a two-year high on Monday, while gasoline futures rose 3.8% to $2.4620 per gallon after a 3.7% increase.
European diesel futures rose 9.2% to $967.75 per metric ton after an 18% increase on Monday.