Oil Prices Climb Amid Escalating Israel-Iran Tensions

New Delhi – Oil prices surged on Tuesday as geopolitical tensions in the Middle East intensified, following a call by former U.S. President Donald Trump for the evacuation of Tehran — a move that has fueled fears of a wider regional conflict.

Prices initially spiked, with Brent crude rising as much as 2.2%, briefly trading above $73 per barrel before easing slightly as markets remained wary of any major disruption to oil supplies.

West Texas Intermediate (WTI) also gained, hovering close to $72, after earlier falling on Monday when Iran appeared to be de-escalating tensions. However, continued Israeli military strikes targeting Iranian nuclear sites since last Friday have kept global markets on edge.

Attention remains focused on the Strait of Hormuz, a critical chokepoint for global oil trade through which nearly 20% of the world’s daily oil supply passes. Maritime security firm Ambrey reported a possible incident near the strait on Tuesday, though specific details were unclear.

While the conflict has yet to cause physical damage to Iran’s oil-export infrastructure, its effects are already being felt in the shipping sector. The UK Navy has reported navigation signal issues in the Strait of Hormuz and the Persian Gulf, prompting several shipping companies to suspend bookings in the region due to safety concerns.

Despite the partial reversal in gains, oil prices remain higher than they were before the current conflict began. The heightened volatility has led to record levels of hedging by oil producers and an increase in trading of futures and options.

Morgan Stanley has raised its oil price forecasts, citing the growing risk of supply disruptions driven by the escalating conflict.

Meanwhile, reports suggest the White House is considering direct talks with Iranian officials this week in an effort to revive the nuclear agreement and broker a resolution to the ongoing war.

Israel has claimed to have gained control over significant parts of Iranian airspace and inflicted severe damage on its missile and nuclear infrastructure since launching the military campaign, further fueling fears of a broader war in a region responsible for nearly one-third of global oil production.

With inputs from IANS