West Texas Intermediate (WTI), futures on NYMEX, trades 1% higher to near $69.40 during the European trading session on Tuesday.
The oil price gains after reports that Iran attacked at least two commercial ships transiting through the Strait of Hormuz, a vital passage to almost one-fifth of global energy supply, renewing fears of supply disruptions
According to an Axios report, Iran fired at least two missiles at commercial ships transiting through the Hormuz. Two commercial ships were hit and suffered significant damage, but no casualties were reported, Bloomberg reported. While the impact of the event is expected to be limited, as the United States (US) has not delivered any remark regarding the matter, suggesting that the ceasefire with Iran remains intact.
However, US President Donald Trump threatened to attack Iranian infrastructure on Monday if it doesn’t finalize a deal soon. In response, Iran’s Foreign Minister Abbas Araghchi has warned, “Negotiations on a final deal will not commence if threats continue. Honour your signature.” Meanwhile, the announcement of a hike in the overall oil output by the OPEC+ has increased the global supply, a scenario that weighs on oil prices.