-- Oil prices dipped on Tuesday as the US military launched Project Freedom to break the blockade of the Strait of Hormuz.
Front-month Murban crude futures fell 1.2% to $106 per barrel, while Brent futures fell 2% to $112.06/bbl.
However, the decline was sharply checked by a direct exchange of fire between US and Iranian forces and a drone strike on the UAE's Fujairah oil terminal, which shattered a month-long ceasefire and reignited fears of a prolonged global energy crisis, analysts said.
Analysts noted that the oil market remains on high alert following breaking news of an attack on a US Navy vessel.
The hostilities broke out as the US initiated a mission to extract commercial ships currently trapped within the Persian Gulf.
While US Central Command reportedly confirmed that two American merchant ships successfully completed their transit through the Strait of Hormuz, a subsequent direct fire exchange between US and Iranian forces now endangers the survival of the ceasefire established four weeks ago.
The regional fallout intensified as the UAE reported its first defensive interceptions of Iranian missiles and drones since the April 8 ceasefire began.
However, one Iranian drone successfully struck an oil terminal at the Port of Fujairah, sparking a major fire at the facility.
Record-breaking supply losses of 10 million barrels per day have already depleted global inventories, and experts warn that if the Strait remains obstructed, this energy crisis could extend through late 2026 and into 2027.