Oil prices are climbing again, and this time, the market is watching Strait of Hormuz that could determine where crude prices go next. Crude rose for a third straight session as hopes of a lasting agreement between US and Iran began to fade.
Tehran warned that it could take a more aggressive military approach, while Washington has ruled out extending the temporary ceasefire, which put traders back on edge.
Tanker traffic through the strait remains extremely limited, and another vessel was reportedly hit by a projectile while leaving the waterway on Tuesday. For oil markets, that matters because even a relatively small disruption can quickly become a much bigger problem when it involves such an important energy route.
Oil prices move higher
| Market | Price | Change |
|---|---|---|
| WTI crude | $85.00 | +0.59% |
| Brent crude | $90.98 | +0.12% |
| Murban crude | $98.20 | +0.51% |
| Natural gas | $2.703 | +0.48% |
The prices were reported with delays of between 10 and 15 minutes.
A senior Iranian official said Iran could move toward a “fully offensive” military posture after attempts to reach a permanent end to the conflict stalled. At the same time, the US has indicated that the temporary ceasefire will not be extended.
That has created a simple but worrying question for the oil market: if the fighting continues, how much longer can energy shipments move normally?
Hormuz is at the center of that concern. Shipping movements through the waterway have fallen to just a handful of crossings, despite a modest improvement from the weekend. The latest reported strike on a vessel leaving the strait has added another layer of uncertainty for ship operators and oil traders.
On the other hand, Yemen’s Houthi movement launched missiles at vessels it described as a Saudi military ship and four escorts. The claim, made by Houthi military spokesperson Yahya Saree, adds to the wider security risks facing ships moving through the region.
There is still a potential diplomatic opening. Iran has been negotiating with Oman over arrangements for managing the Strait of Hormuz and says the two sides are close to an agreement. But even that effort has become part of the geopolitical tension. US President Donald Trump has threatened Oman with military action despite the Gulf country being a longstanding US security partner.
So, while diplomats continue looking for a way forward, the oil market is preparing for the possibility that the standoff could last much longer.
