US-Iran War: Crude oil prices remained relatively stable on Tuesday as investors kept a close watch on whether Donald Trump would take any steps to de-escalate the ongoing tensions with Iran. Additionally, the market is weighing the risk of a prolonged closure of the Strait of Hormuz—a critical global supply route—which could disrupt worldwide oil supplies.
Brent crude for May delivery rose by 18 cents, or 0.16%, reaching $112.96 per barrel at 0438 GMT; earlier in the session, it had dropped by 1%. The May contract is set to expire on Tuesday, while the June contract—which is being more actively traded—stands at $107.10.
Meanwhile, US West Texas Intermediate (WTI) crude for May delivery fell by 25 cents, or 0.24%, to $102.63 per barrel; earlier in the day, it had touched its highest level since March 9.
Oil Prices Steady Amid Hormuz Risks, Trump Signals
According to a *Wall Street Journal* report citing administration officials, Donald Trump has signaled to his aides that he may be prepared to halt military operations against Iran, even if the Strait of Hormuz remains largely closed—leaving its reopening to be addressed at a later stage.
However, on Monday, Trump warned that if Tehran fails to reopen this key shipping lane, the US would “totally destroy” Iran’s energy infrastructure and oil facilities.
Sharp Surge in Crude Oil Prices
Crude oil prices have witnessed a sharp surge following Iran’s effective closure of the Strait of Hormuz. This strait is a vital waterway through which approximately one-fifth of the global oil supply—as well as large volumes of Liquefied Natural Gas (LNG)—is typically transported.
So far in March, Brent crude futures have surged 59%, marking their largest monthly gain on record; meanwhile, WTI crude has risen 58% this month—its strongest performance since May 2020.
‘Al Salmi’ Hit by Alleged Iranian Attack
Underscoring the risks looming over seaborne energy supplies amidst the ongoing conflict involving Iran, the U.S., and Israel, the Kuwait Petroleum Corporation told Reuters on Tuesday that its fully loaded crude oil tanker, the ‘Al Salmi’—which has a capacity of up to 2 million barrels—was struck in an alleged Iranian attack near a port in Dubai. Officials have also warned of the potential for an oil spill in the area.
Meanwhile, on Saturday, Yemen’s Iran-backed Houthi forces launched missile attacks toward Israel, heightening concerns regarding potential disruptions in the Bab al-Mandeb Strait—a critical maritime corridor connecting the Red Sea and the Gulf of Aden, and a key trade route between Asia and Europe via the Suez Canal.
Disclaimer: This article is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
(With agencies input)