Global oil futures jumped sharply on Tuesday, clawing back much of the previous day’s heavy losses as fresh fears gripped the market over the near-total shutdown of the Strait of Hormuz, the world’s most vital oil chokepoint.
Brent crude, the global benchmark, rose $3.07, or 3.1 percent, to $103.28 a barrel by 0734 GMT. U.S. West Texas Intermediate (WTI) climbed even more steeply, gaining $3.35, or 3.6 percent, to $96.85.
The rebound followed a bruising session on Monday when Brent settled 2.8 percent lower, and WTI plunged 5.3 percent after a handful of tankers managed to slip through the waterway.
The Strait of Hormuz, which normally funnels about one-fifth of global seaborne oil and liquefied natural gas, has been effectively paralyzed for days by the ongoing U.S.-Israeli war on Iran, now in its third week.
The disruption has sent shockwaves through energy markets, stoking worries about acute supply shortages, spiking consumer energy bills, and a fresh wave of inflation worldwide.
“The risks remain stark,” warned IG market analyst Tony Sycamore in a client note. “It only takes one Iranian militia to fire a missile or plant a mine on a passing tanker to reignite the entire situation.”
Compounding the tension, several key U.S. allies on Monday flatly rejected President Donald Trump’s public call for warships to escort commercial shipping through the strait. Trump lashed out at the partners, accusing them of “ingratitude” after decades of American security support.
Market participants say the focus has now shifted to how long the conflict will drag on and what permanent damage it may inflict on Gulf oil infrastructure.
“For now, oil markets are fixated on the duration of the conflict, halted supplies at Hormuz, and eventually the damage this chaos will leave on oil infrastructure in the Gulf,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Prices received an additional lift on Tuesday after reports of a drone strike sparked a fire at the Fujairah Oil Industry Zone in the United Arab Emirates during Asian trading hours. No injuries were reported, but the incident underscored the widening reach of the conflict beyond the strait itself.
Middle East crude benchmarks have rocketed to all-time highs, making regional grades the most expensive oil on the planet. Traders point to a sharply reduced supply available for immediate delivery as the main driver. The United Arab Emirates—OPEC’s third-largest producer—has been forced to shut in more than half its output because tankers can no longer load at its terminals.
Technical analysts see further upside. OANDA senior market strategist Kelvin Wong noted that WTI still has “room to run” and identified a medium-term resistance level at $124 a barrel.
The head of the International Energy Agency urged member countries to consider releasing additional barrels from strategic stockpiles beyond the 400 million already earmarked in a bid to ease the pressure on consumers.
On the ground, Israeli officials said overnight strikes hit multiple sites across Iran and confirmed the military has detailed operational plans for “at least three more weeks” of combat.
With the Hormuz artery still blocked and no immediate diplomatic breakthrough in sight, traders are bracing for continued volatility. A swift resolution could send prices tumbling; prolonged chaos, analysts warn, risks pushing crude well beyond current levels and reigniting global inflationary fears.
WHAT YOU SHOULD KNOW
The sharp 3% surge in oil prices today underscores one critical reality: the effective closure of the Strait of Hormuz, the chokepoint for 20% of global oil and LNG trade, due to the ongoing U.S.-Israeli war on Iran, remains the dominant driver of market volatility.
Despite a brief dip yesterday, renewed supply fears, allied reluctance to escort tankers, and fresh incidents like the Fujairah drone attack have pushed Brent to $103.28 and WTI to $96.85, with analysts warning of further upside risks toward $124 if the conflict drags on.
