Geopolitical tensions in the Middle East drive oil prices higher as traders weigh supply disruption risks ahead of key inventory data.
West Texas Intermediate crude climbed 2.58% to $84.40 on Tuesday, fueled by escalating geopolitical risks in the Middle East. U.S. airstrikes against Iran entered a tenth day, while Iran-backed groups targeted U.S. military sites in Bahrain and Kuwait, heightening concerns over regional energy flows.
The Strait of Hormuz, a critical chokepoint for global oil exports, remains under threat as Houthi rebels imposed a maritime embargo on Saudi Arabia. Despite diplomatic efforts to ease tensions, supply disruption fears continue to dominate market sentiment.
Investors are now focused on the upcoming American Petroleum Institute crude inventory report, which could provide further direction for oil prices. Analysts note the persistent geopolitical premium remains a key driver for the market.