The price of Brent crude oil exceeded USD 85 per barrel for the first time since July 2024.
Oil prices are rising strongly for the second session in a row, and on Tuesday the price of Brent exceeded USD 85 per barrel for the first time since July 2024. Investors are concerned about the supply and transportation of crude oil in the Persian Gulf region amid the rapid escalation of the war between Israel and the US against Iran in the entire region.
A barrel of West Texas Intermediate crude oil for April deliveries is currently up 7.55% on the NYMEX in New York. to $76.56. The price of Brent on ICE for May increases by 8.2%. to USD 84.11 per barrel.
The US and Israel's war on Iran has intensified since Israel's first attacks on Saturday. Israel attacked Lebanon and Iran responded with attacks on energy infrastructure in Persian Gulf countries and tankers in the Strait of Hormuz, through which one-fifth of the world's demand for crude oil and liquefied natural gas typically passes.
Tankers and container ships have been avoiding the waterway after insurers canceled ship insurance and global oil and gas shipping rates skyrocketed, leading to a drastic reduction in traffic on the route. Concerns intensified after Iranian media reported on Monday that a senior Iranian Revolutionary Guard official had announced the closure of the Strait of Hormuz and warned that Iran would fire on any ship trying to pass. So far, several ships have been fired upon since Saturday.
“While there are concerns about the flow of oil through the Strait of Hormuz, a greater risk to the market would be if Iran attacked additional energy infrastructure in the region. This could lead to longer supply disruptions,” ING analysts wrote in the report.
Authorities in the United Arab Emirates are grappling with a serious fire in the port of Fujairah, state media reported on Tuesday. Falling debris from a downed drone caused a major fire in Fujairah, the main oil trading center in the United Arab Emirates. This is the latest in a series of incidents that have hit major energy facilities in the Middle East.
The Fujairah press office reported in a post on X that civil defense units were working to bring the fire under control. Another fire was reported in the area on Tuesday morning, and operations at the main storage terminal and oil refinery were suspended the day before.
Fujairah is a key port and one of the largest oil storage and trading centers in the Middle East. It is of strategic importance to the United Arab Emirates due to its location beyond the Strait of Hormuz.
With a pipeline connecting storage tanks in the area to Abu Dhabi's oil fields, Fujairah also represents a key alternative export route for the United Arab Emirates. Still, the pipeline does not have enough capacity to fully replace all oil flow through the Persian Gulf and Strait of Hormuz.
Bernstein on Monday raised his forecast for the price of Brent crude oil in 2026 to $80 a barrel from $65, but said that in the extreme case of a prolonged conflict, prices could reach $120-150.
“The Iranian regime is under threat and is willing to do anything to get the world's attention and stop it. So far, the market response has been rather muted, but the longer it lasts, the greater the risk of price increases,” said Gary Ross, an oil consultant and current hedge fund manager at Black Gold Investors.
The war in Iran is now in its fourth day, and there is no indication that it will be eased. This increases market fears of long-term disruptions in energy markets and a significant increase in inflation.
Situated between Oman and Iran, the strait is a key artery for the global oil trade. According to the consulting company Kpler, in 2025 about 13 million barrels per day flowed through it, which constituted about 31%. all marine oil flows.
A long-term closure of the strait would likely lead to further increases in oil prices, with some analysts forecasting the price to exceed $100 a barrel. The global benchmark Brent rose by almost 10%. since the outbreak of the war.
According to Kpler, about 20 percent are also at risk. world exports of liquefied natural gas from the Persian Gulf. This applies primarily to gas from Qatar, sent through the Strait of Hormuz.
Since the attacks began in the region, oil and gas infrastructure in several countries has been closed due to damage or as a precautionary measure. Qatar stopped production of liquefied natural gas (LNG), Israel stopped production in some gas fields, Saudi Arabia closed its largest refinery, and production in Iraqi Kurdistan virtually stopped.
US Secretary of State Marco Rubio announced that the strongest US attacks on Iran are yet to come. He added that the goal of the US operation is to destroy Iran's ballistic and naval capabilities. President Donald Trump, in turn, indicated that the US will continue its operation in Iran, no matter what it takes.
On Saturday morning, Israel and the US launched airstrikes against targets in Iran. Tehran responded by attacking American bases in several countries in the region, as well as Israel. Among those killed in air raids were: Iran's Supreme Leader Ali Khamenei and a group of leading figures of the Iranian regime.
US President Donald Trump estimated on Sunday that the operation against Iran could last four weeks. (PAP Business)
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