Crude oil prices extended a rally on Tuesday supported by persistent geopolitical conflict in the Middle East as strikes targeting Saudi Aramco's energy infrastructure in Jazan raised supply fears.
Front-month West Texas Intermediate futures gained 1.1% to $92.59 per barrel, while Brent futures were up 0.6% to $97.53/bbl. Brent hits its highest since July 24 while WTI hit its highest since June 8.
"Crude holds most of last week's strong gain, with Brent briefly topping $98 a barrel on Monday, a six-week high," Saxo Bank analysts said.
"Tehran also warned that vessels face the risk of attack near Oman, highlighting the continued uncertainty surrounding regional shipping and supply flows," the analysts noted.
Data from Kpler shows that vessel crossings through the Strait of Hormuz dropped 22% last week to 77 ships, with laden voyages falling to 33.
The supply strain expanded on Monday as energy installations in the southern region of Saudi Arabia including Saudi Aramco's facilities in Jazan, came under fresh attack.
According to an official source at the Ministry of Energy and regional reports, the strikes caused fires at multiple locations, leading to a temporary halt in certain operations.
On the geopolitical front, Qatar and China discussed diplomatic efforts to ease tensions in the Middle East on Tuesday, including the need to ensure safe and free passage through the crucial Strait of Hormuz waterway, according to a statement from Qatar's Ministry of Foreign Affairs.
In Iran unsubsidized gasoline prices will double to 10,000 tomans per liter starting September 8, though baseline monthly quotas of 60 liters at 1,500 tomans remain protected.