Global crude oil prices rose by around 3% on Tuesday, reaching their highest levels in four weeks. This increase was triggered by the United States reinstating its naval blockade of Iran and escalating military activities near the Strait of Hormuz, raising concerns about potential disruptions to global crude supplies.
The international benchmark Brent crude spiked by 2.82%, reaching over $85 per barrel, while US West Texas Intermediate (WTI) crude also saw a nearly 3% increase to $80.42 per barrel. In the domestic market, MCX crude oil futures surged by 4.51%, reaching Rs 7,692 as of 11:08 am.
The recent surge in oil prices followed a significant 10% jump in Brent prices in the previous session, marking the largest single-day gain since May 2020. Heightened geopolitical tensions have reignited worries about the security of energy supplies from the Persian Gulf, leading to increased volatility in crude oil prices.
Analysts predict that crude oil prices are likely to remain unstable as geopolitical tensions persist, influencing market sentiment. The US administration’s actions, including the naval blockade of Iran and military strikes, have contributed to the current market uncertainties.
US President Donald Trump announced the reinstatement of the blockade on Iranian shipping, emphasizing that countries benefiting from US protection in the Strait of Hormuz would be required to compensate the US for the operation. Meanwhile, Iran responded by intensifying its military activities, launching drones towards US assets in Kuwait and firing cruise missiles at a perceived hostile vessel.
