Crude prices surged over 2% on Tuesday, extending gains for a third day as compounding geopolitical shocks, including a reported tanker strike near Oman, intensified global supply security concerns.
Front-month West Texas Intermediate crude futures rose over 2% to $85.03 per barrel, while Brent futures climbed by 1.9% to $90.84/bbl.
According to Saxo Bank analysts, the upward price movement was catalyzed by a Houthi naval blockade targeting Saudi Arabia, a tenth consecutive day of US airstrikes against Iran, and a tanker strike in the Strait of Hormuz.
The security crisis in the region escalated further when the UK Maritime Trade Operations reported that a commercial tanker situated about 8 nautical miles northwest of Limah, Oman, was struck by an unknown projectile in the Strait of Hormuz.
Meanwhile, Reuters reported that major Indian state-run refiners, including Indian Oil and Mangalore Refinery and Petrochemicals, canceled plans to lift Iraqi crude from the Basrah Oil Terminal to avoid the increasingly hazardous chokepoint.
"The market isn't pricing whether a ship can sail through Hormuz. It's pricing whether anyone actually wants to," Kpler analysts noted.
While diplomatic channels remained active, highlighted by reports that Tehran received a mediator-backed proposal for a 10-day ceasefire, ongoing US airstrikes targeting anti-shipping capabilities kept risk premiums elevated.