Global oil prices climbed sharply on Tuesday after fresh United States strikes against Iran increased concerns over the stability of a fragile ceasefire and raised fears of renewed disruption to global energy supplies.
The rise in oil prices came as investors assessed the possibility of further military escalation in the Middle East, particularly around the Strait of Hormuz, one of the world’s most important energy shipping routes.
International benchmark Brent North Sea crude rose by as much as five percent on Tuesday, trading around $87 a barrel after prices had already surged more than nine percent on Monday.
The latest increase reflected growing market concerns that continued conflict could disrupt oil flows from the Gulf region and add further pressure on already elevated inflation levels.
The situation intensified after Iranian forces struck a commercial vessel in the Strait of Hormuz early Sunday, before Tehran announced the closure of the strategic waterway.
The Strait of Hormuz, located between Iran and Oman, is a critical passage for global energy markets, with around one-fifth of the world’s oil supply transported through the route.
Following the announcement, the United States carried out a series of strikes on targets inside Iran. Tehran responded by launching attacks against locations in Bahrain, Jordan, Kuwait and Oman, further increasing fears of a wider regional conflict.
US President Donald Trump later threatened to restore a naval blockade on Iranian ports, although he said diplomatic negotiations with Tehran remained possible.
“The prospect of more fighting and a fresh blockade has meant that traffic through the Strait has slowed to a near halt,” said Kathleen Brooks, research director at trading group XTB.
“When the supply chain gets gummed up, this is what keeps upward pressure on the oil price,” she added.
READ MORE: US Strikes Iran Again as Hormuz Blockade Threat Escalates
Energy analysts warned that prolonged disruption in the region could create additional challenges for global markets, particularly as countries continue efforts to manage inflation and interest rate pressures.
The increase in oil prices also affected global stock markets, with European equities coming under pressure while Asian markets delivered a mixed performance.
Asian shares were supported by gains among technology companies, which recovered slightly after a recent wave of selling linked to concerns that artificial intelligence-related stocks had risen too quickly.
South Korea’s benchmark index ended higher after experiencing significant volatility during the trading session. The market had fallen as much as five percent before recovering.
Chipmaker SK hynix gained more than three percent, following a 15 percent decline the previous day. Rival Samsung also increased by 3.3 percent.
Other Asian markets, including Tokyo, Hong Kong, Shanghai, Singapore, Manila and Jakarta, recorded gains, while markets in Wellington, Taipei, Mumbai and Bangkok ended lower.
Investors are also focused on several major economic events this week, including the start of corporate earnings season, testimony from Federal Reserve Chairman Kevin Warsh before Congress and the release of new US inflation data.
Susannah Streeter, chief investment strategist at Wealth Club, said inflation figures would be closely watched by investors.
“A softer-than-expected reading could revive hopes for lower borrowing costs and lift equity markets, while a hotter print would likely send Treasury yields and the dollar higher, piling fresh pressure on stocks,” she said.
The latest oil surge has renewed concerns that higher energy costs could slow progress on inflation and complicate decisions by central banks, including the US Federal Reserve.
Higher oil prices typically increase costs across transportation, manufacturing and consumer goods, potentially pushing inflation higher.
Fed Governor Christopher Waller added to market concerns by warning that stronger inflation data could influence future monetary policy decisions.
“If we get another hot reading on core inflation this week, then the rate-setting committee will need to consider tightening monetary policy in the near term,” Waller said on Monday.
Markets currently estimate a 39 percent chance that the Federal Reserve will increase interest rates at its upcoming meeting later this month. That expectation rises to more than 76 percent for a possible rate increase in September.
With geopolitical tensions, energy markets and inflation risks closely connected, investors are expected to continue monitoring developments in the Middle East for signs of further disruption.
