Oil Prices Continue to Soar

Oil prices continued to rise on Tuesday, with WTI crude futures trading near $77 a barrel, the highest level since January 2025, extending an over 6% gain from the previous session. The escalating conflict with Iran is disrupting fuel shipments and raising concerns about further supply disruptions across Middle East oil and gas markets. Yesterday, Aramco halted operations at Saudi Arabia’s largest oil refinery in Ras Tanura on the Persian Gulf coast following a drone strike. Today, falling debris from an intercepted drone triggered a major fire at the UAE oil-trading hub of Fujairah, although normal operations have since resumed. Meanwhile, Iran has not officially closed the Strait of Hormuz, and Foreign Minister Abbas Araghchi stated the country has no intention of doing so. Nevertheless, shipping activity through the narrow strait has largely halted, and many insurers are planning to withdraw war-risk coverage for vessels entering the Persian Gulf.

WTI crude futures rose more than 8% toward $77 per barrel on Tuesday after rallying roughly 6% in the prior session, as traders tracked escalating hostilities in the Middle East and mounting risks of a full shutdown of the Strait of Hormuz. Trump said the US would do “whatever it takes” when asked how long the war with Iran could persist. A senior US official also reportedly indicated that the US was preparing a significant escalation in strikes on Iran within the next 24 hours, targeting its missile production, drones and naval assets. Meanwhile, a high-ranking Iranian official warned that ships attempting to transit the strait could be targeted. Tanker flows through the Strait of Hormuz, a vital chokepoint accounting for roughly one-fifth of global oil shipments, have effectively stalled amid heightened security risks. Saudi Aramco also temporarily suspended operations at its Ras Tanura refinery, the kingdom’s largest, while evaluating damage after a drone strike hit the facility.

WTI crude futures surged nearly 6% on Monday, climbing toward $71 a barrel, the highest level since June last year, amid escalating tensions in the Middle East and concerns over potential disruptions in the Strait of Hormuz, a critical chokepoint that handles roughly one-fifth of global oil shipments. Shipping companies have begun rerouting vessels away from the narrow waterway as a precaution. The spike in prices followed a series of strikes by the US and Israel on Iran, which prompted retaliatory attacks by Tehran against regional targets. Saudi Aramco temporarily halted operations at its Ras Tanura refinery, the kingdom’s largest, while assessing damage after a drone attack targeted the facility. Meanwhile, OPEC+ on Sunday agreed to raise output by 206,000 barrels per day in April, ending a three-month pause. However, this increase fell short of the 411,000–548,000 barrels per day that had been under previous consideration, keeping the market on edge amid geopolitical uncertainty.