Global oil prices moved higher on Tuesday as tensions in the Middle East continued, with countries pushing back against calls to secure the key Strait of Hormuz and fresh attacks targeting oil-producing regions, reported the AFP.
The oil prices rebounded after falling in the previous session.
The earlier drop came after the head of the International Energy Agency (IEA) suggested that more oil reserves could be released if needed. However, ongoing tensions pushed prices back up, with both major crude benchmarks rising over 2 percent and hovering around the USD 100 mark.
Strait of Hormuz tensions intensify
The Strait of Hormuz, a crucial global oil route, remains a major concern after Iran effectively closed it.
US President Donald Trump urged allies to help secure the waterway, calling it a shared responsibility. But several countries, including Germany, the UK, Spain, Poland, Greece, Sweden, Australia, and Japan, showed little willingness to join the effort.
Trump further warned that a lack of support could adversely affect the future of NATO and on Monday, he told The Financial Times that he had asked to delay a summit with Chinese leader Xi Jinping by a “month or so” over the issue as per AFP reports.
Attacks continue across the region
The situation remains tense, with continued attacks on oil infrastructure and strategic locations:Â
i. Drone strikes hit major oil fields in the UAE and Iraq
ii. Israel carried out large-scale strikes in Tehran and Beirut
iii. The US embassy in Baghdad was targeted with rockets and drones
iv. A tanker near the Gulf was hit, though damage was minor
v. Despite risks, a Pakistani oil tanker successfully passed through the Strait of Hormuz, offering a small sign of stability.
Markets hold firm despite crisis
Global stock markets showed resilience despite rising oil prices and geopolitical tensions. Asian markets, including Tokyo, Hong Kong, Shanghai, and Seoul, recorded gains. Tech stocks led the rally after Nvidia projected strong long-term revenue growth. Wall Street also ended higher, reflecting investor confidence, though analysts warned that the rally may not be sustained if risks continue.
Pepperstone’s Chris Weston said that “conviction behind a sustained rally in risk assets remains relatively low,” though investors should stay open to the possibility that momentum could build.
While the IEA’s comments and the tanker movement offered some relief, he cautioned that “it is difficult to view these developments as a definitive de-escalation” or a real turning point for the energy risk premium as per AFP reports
Investors are now watching upcoming central bank decisions, as rising oil prices could increase inflation and lead to higher interest rates.
Key market figures
West Texas Intermediate (WTI)
Up 2.4 percent at USD 95.77 per barrel
Brent North Sea Crude
Up 2.6 percent at USD 102.84 per barrel
Tokyo – Nikkei 225
Up 0.5 percent at 54,013.73 (mid-session)
Hong Kong – Hang Seng Index
Up 1.5 percent at 26,224.17
Shanghai – Composite Index
Up 0.5 percent at 4,103.72
Euro/Dollar
Down at USD 1.1493 (from USD 1.1510)
Pound/Dollar
Down at USD 1.3307 (from USD 1.3327)
Dollar/Yen
Up at 159.37 yen (from 159.14 yen)
Euro/Pound
Up at 86.38 pence (from 86.36 pence)
New York – Dow Jones
Up 0.8 percent at 46,946.41 (close)
London – FTSE 100
Up 0.6 percent at 10,317.69 (close)
(With AFP Inputs)
