Oil prices extended their rally on Tuesday, with WTI crude futures trading near $76 per barrel—the highest level since January 2025—after surging more than 6% in the previous session. The escalating conflict involving Iran is disrupting fuel shipments and heightening fears of further supply interruptions across Middle Eastern oil and gas markets.
On Monday, Aramco suspended operations at Saudi Arabia’s largest oil refinery in Ras Tanura, on the Persian Gulf coast, following a drone strike. On Tuesday, falling debris from an intercepted drone sparked a major fire at the UAE’s oil-trading hub of Fujairah, though normal operations have since resumed.
Iran has not formally closed the Strait of Hormuz, and Foreign Minister Abbas Araghchi has stated that the country has no intention of doing so. Even so, shipping traffic through the strategic waterway has largely ground to a halt, and many insurers are preparing to withdraw war-risk coverage for vessels entering the Persian Gulf.
