Crude oil climbed back above $83 per barrel on Tuesday, reversing earlier losses as traders weighed escalating conflict in the Middle East against fresh diplomatic overtures. The United States carried out a 10th straight day of strikes after President Donald Trump warned that Iran “will pay” for attacks that killed American soldiers, while Tehran responded with missile and drone strikes on targets in Kuwait.
Despite the flare-up, hopes for de-escalation persisted after Iran confirmed it had received mediation proposals, alongside reports of talks over a possible 10-day ceasefire. Oil prices have remained highly volatile as markets react to rapidly shifting expectations of either further confrontation or renewed negotiations.
Supply worries were compounded as Yemen’s Houthi movement threatened to block Saudi maritime traffic in the Red Sea, a critical export corridor that enables the kingdom to bypass the Strait of Hormuz. Saudi Arabia said it would take all necessary measures, in accordance with international law, to safeguard its shipping.
