Oil prices rose nearly 3% on Tuesday to their highest in four weeks, as the US reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz, heightening uncertainty about energy flows. Brent crude futures were last up $1.50, or 1.8%, to $84.80 per barrel, while US West Texas Intermediate crude rose $1.70, or 2.2%, to $79.84 a barrel.
Both contracts earlier rose more than $2 a barrel before paring some gains, while Brent had surged 9.6% in the previous session, its biggest daily gain since May 2020. Oil prices are now at their highest since the two countries signed a memorandum of understanding to end the war on June 17.
The US military carried out a third consecutive night of strikes against Iran on Monday, as US President Donald Trump reinstated a blockade of Iranian shipping and proposed charging a 20% fee to guard the Strait of Hormuz. “The latest escalation, including the U.S. reinstatement of the blockade and Iranian responses, has clearly injected fresh risk into the market,” KCM Trade chief market analyst Tim Waterer said.