Oil Rises As Israel‑Iran Conflict Rages On: Fears Linger Over Hormuz Strait Supply Choke Point

Oil prices rose on Tuesday as Israel and Iran continued to strike each other, raising concerns over oil supply from the Middle East.

On Monday, U.S. President Donald Trump cut short his visit to Canada for the Group of Seven summit after urging people in Tehran to evacuate.

Brent crude futures rose 1.4% to $74.24 per barrel while U.S. West Texas Intermediate crude futures gained 1.2% to $71.06 per barrel, as of 5.03 am ET.

On Tuesday, Iranian state media reported several explosions in Tehran. At the same time, as per Israeli publications, air raid sirens could be heard in Tel Aviv after midnight, and there was also a sound of an explosion.

While Iran has not attacked the Strait of Hormuz, a pivotal passage for oil tankers, concerns persist about the crucial passage.

According to media reports, Iranian military officials have previously threatened to shut down the Strait, through which one-fifth of the world’s oil is transported daily.

Iran, the third-largest producer among OPEC countries, will likely not do so as it transports much of its oil through the passage, Reuters reported, citing an analyst.

According to the report, electronic warfare measures that interfered with navigation systems have impacted ships moving in the vicinity of the Strait and the Gulf.

The United States Oil Fund (USO) has gained 2.3%, while ProShares Ultra Bloomberg Crude Oil (UCO) has fallen 8.7% in extended trading.

Separately, the International Energy Agency trimmed its world oil demand forecast by 20,000 barrels per day, compared to the previous month. It also raised the supply estimate by 200,000 bbl/d.

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