Key Moments
- Brent crude futures traded at $91.22 a barrel and U.S. WTI at $85.31 a barrel by 0827 GMT, marking a third consecutive session of gains.
- Expectations for a U.S.-Iran peace deal diminished as Washington declined to prolong a temporary ceasefire and Iran signaled a shift to a more offensive posture.
- Tensions in key shipping lanes persisted, with a projectile striking a vessel exiting the Strait of Hormuz and Yemen’s Houthis targeting ships in the Red Sea.
Oil Futures Climb to Multi-Week Highs
Oil prices advanced for a third straight session on Tuesday as hopes for an agreement to halt the Middle East conflict faded, raising the risk of extended disruptions to energy flows.
By 0827 GMT, Brent crude futures gained 35 cents, or 0.39%, to $91.22 per barrel. U.S. West Texas Intermediate (WTI) crude futures rose 81 cents, or 0.96%, to $85.31 per barrel.
Both benchmarks were on track for a third consecutive day of increases. During the session, Brent reached its highest level since July 30, while WTI touched its strongest level since July 31.
| Contract | Price ($/bbl) | Change ($) | Change (%) | Noted High Since |
|---|---|---|---|---|
| Brent crude futures | 91.22 | 0.35 | 0.39% | July 30 |
| WTI crude futures | 85.31 | 0.81 | 0.96% | July 31 |
Market Sentiment and Policy Signals
Analysts pointed to growing geopolitical risks and U.S. policy decisions as key drivers of the recent strength in crude.
“Sentiment remained supported by US President Donald Trump’s decision not to extend the US-Iran peace agreement and continued security concerns in the Strait of Hormuz,” ING analysts wrote in a note.
Progress toward a peace agreement and the normalization of tanker movements through the Strait of Hormuz has stalled, raising the likelihood of a longer conflict following U.S. and Israeli attacks on Iran on February 28.
A senior Iranian official told Reuters on Monday that Iran would move to a “fully offensive” military stance after efforts toward a permanent settlement of the war faltered. At the same time, Washington ruled out prolonging its temporary ceasefire accord.
“The lack of any kind of deal will have an impact on oil price expectations further out in 4Q and even in 2027,” said DBS Bank’s head of energy research Suvro Sarkar.
Strait of Hormuz: Shipping Risks and Supply Concerns
Tensions around the Strait of Hormuz, a critical passage for global oil shipments, remained elevated. Tracking data indicated that a projectile hit a vessel leaving the strait on Tuesday, the latest in a series of incidents that have restricted daily crossings to single digits, despite a modest uptick from the weekend.
Saudi Aramco has restarted oil loadings from within the Strait of Hormuz and is marketing cargoes for loading via ship-to-ship transfers off Fujairah in the United Arab Emirates.
“It is probably in Iran’s power to fully halt the flow of oil out of the Strait of Hormuz whenever they find it suitable. Or they will soon have built the capability of that. Iran is for sure not just sitting still waiting for new US sanctions,” said SEB analyst Bjarne Schieldrop.
Iran has also been in talks with Oman on an arrangement for managing the Strait of Hormuz and has stated that the two sides are close to an agreement. According to the article, U.S. President Donald Trump responded to those discussions with a threat to bomb Oman, described as a longstanding U.S. security partner.
Broader Regional Flashpoints
Beyond the Strait of Hormuz, security risks are also emerging elsewhere in the region. In the Red Sea, Yemen’s Houthi movement fired missiles at what it described as a Saudi military vessel and four accompanying ships, according to military spokesperson Yahya Saree on the Telegram messaging app.
These overlapping flashpoints across vital shipping routes are reinforcing market concerns over potential supply interruptions and supporting crude prices across the forward curve.
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