Oil prices remained near five-month highs on Tuesday as traders assessed continuing supply risks in the Middle East, despite signs that crude shipments from the Persian Gulf were recovering. Brent crude traded above $110 a barrel, reflecting concerns over attacks on energy infrastructure and shipping routes.
The uncertainty comes amid the war with Iran, which has disrupted regional energy transportation and raised shipping costs. While crude exports have recovered to some extent, the threat of further attacks in the Strait of Hormuz continues to influence oil and gas markets.
Brent Crude Holds Above $110 Despite Recovering Gulf Shipments
December Brent crude futures rose 0.9% to $110.48 a barrel on Tuesday, while December West Texas Intermediate futures gained 0.9% to $99.39, according to Dow Jones. The increases followed Monday’s losses, when traders assessed President Donald Trump’s decision to waive newly imposed sanctions on Russia.
The price movements came despite relatively strong crude flows from the Persian Gulf. US Energy Secretary Chris Wright told Fox News that shipments had recovered to approximately 80% of their prewar levels, although supplies of refined petroleum products remained more constrained.
According to ING commodities strategists cited by euronews, persistently high prices suggest that traders are incorporating a substantial geopolitical risk premium into oil contracts. The bank noted that this premium could gradually decline if shipments continue without further interruptions, but there were no indications of an imminent reduction.
Transportation costs are adding another source of pressure. Tanker freight rates have reached record levels, increasing the expense of moving crude through international shipping networks.
The United States is considering allowing sanctioned tankers to return to the legitimate shipping market, potentially expanding available capacity. ING analysts cautioned that the number of vessels involved and the speed at which they could provide relief remain uncertain. Meanwhile, the disruption extends beyond crude oil. Asian spot prices for liquefied natural gas reached $30.4 per million British thermal units on Monday, their highest level since December 2022, according to Bloomberg figures cited by Euronews.
European natural gas prices also remained elevated. Dutch TTF futures for delivery next month traded just below €88 per megawatt-hour on Tuesday morning, after briefly exceeding €89 earlier in the session.
Shipping Attacks and Diplomatic Uncertainty Sustain Market Concerns
Security incidents involving commercial vessels have continued to raise concerns about energy transportation across the region.
UK Maritime Trade Operations reported that an LNG tanker came under fire from a small boat off Yemen on Saturday. Separate reports described an attack on a tugboat near the United Arab Emirates on Sunday, following attacks on two tankers off Saudi Arabia on Friday.
The Wall Street Journal also reported that Iran had provided Yemen’s Houthi militia with intelligence and targeting assistance for attacks against Saudi Arabia. Diplomatic uncertainty remains another factor influencing prices. Deutsche Bank analysts said an agreement between Washington and Tehran before the US midterm elections, scheduled in two weeks, appeared increasingly difficult.
The analysts also identified concerns that Washington could escalate tensions with Iran following the elections, while increased Iranian attacks in the Strait of Hormuz have slowed the recovery of oil shipments. ANZ Research analysts warned that efforts to maintain crude flows through the strait might prove insufficient to stabilize fuel markets as regional supply risks persist.
