Oil hits one-month high as US, Iran step up attacks in Strait of Hormuz

Oil prices rose nearly 3% on Tuesday to their highest in four weeks, as the U.S. reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz. Brent crude futures were up $1.50, or 1.8%, to $84.80 per barrel at 0330 GMT, while U.S. West Texas Intermediate crude rose $1.70, or 2.2%, to $79.84 a barrel. Both contracts earlier rose more than $2 a barrel before paring some gains, while Brent had surged 9.6% in the previous session, its biggest daily gain since May 2020.

Oil prices are now at their highest since the two countries signed a memorandum of understanding to end the war on June 17. The U.S. military carried out a third consecutive night of strikes against Iran on Monday, as U.S. President Donald Trump reinstated a blockade of Iranian shipping and proposed charging a 20% fee to guard the Strait of Hormuz. KCM Trade chief market analyst Tim Waterer said, "The latest escalation, including the U.S. reinstatement of the blockade and Iranian responses, has clearly injected fresh risk into the market." Amid the strikes, two United Arab Emirates tankers were hit by two Iranian cruise missiles in the southern lane of the Strait of Hormuz in Omani territorial waters, the UAE Ministry of Defence said on Monday, killing one Indian crew member and wounding eight others. Shipping data on Monday also showed the number of tankers transiting the Strait of Hormuz fell in the past day to the lowest level in two months.