SINGAPORE: Oil prices moved higher on Tuesday as the deepening conflict between Iran and Israel raised fresh concerns about possible disruptions to supplies from the Middle East, a region that plays a key role in global energy production.
Brent crude rose by 34 cents to $73.57 a barrel as of 0340 GMT, while US benchmark West Texas Intermediate (WTI) was up 29 cents at $72.06. Both benchmarks had jumped more than 2 per cent earlier in the session, bouncing back from Monday’s decline.
Prices had eased a day earlier on signs that tensions might cool, after reports suggested Iran was open to winding down the hostilities. But that hope faded as the fighting entered its fifth day, with Iranian media reporting explosions and air defence activity over Tehran. Meanwhile, air raid sirens were heard in Tel Aviv following reported missile launches.
Market nerves were further rattled after US President Donald Trump posted a message online calling for people to evacuate Tehran, adding to the sense of growing uncertainty.
“The situation between Iran and Israel is still tense and unfolding, and traders are watching closely for any signs of escalation,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “The conflict is creating a strong sense of risk in the oil market.”
She added that uncertainty around the US Federal Reserve’s policy meeting, which begins Tuesday, was also adding to market jitters.
Iran is the third-largest oil producer in OPEC and any disruption to its production or exports could impact the global supply of oil. Adding to the uncertainty, US media reports say President Donald Trump may be looking to restart nuclear talks with Tehran. Meanwhile, a reported shipping incident in the Gulf of Oman has underscored the broader risks to oil transport in the region.
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