Crude oil rose above $86 per barrel on Tuesday, extending the previous session’s gains as renewed conflict in the Middle East heightened fears of further disruptions to regional energy supplies. US forces struck two Iranian rocket launchers on Larak Island, prompting Tehran to retaliate with attacks on the UAE and Jordan and effectively ending roughly a month of relative calm between the US and Iran. President Donald Trump also escalated tensions by threatening military action against Kharg Island, Iran’s key oil export terminal.
Despite the flare-up, oil shipments are still transiting the Strait of Hormuz, with major Gulf producers—including the UAE, Saudi Arabia, Kuwait, and Iraq—continuing to export some volumes. However, the risk to shipping lanes remains acute: a supertanker caught fire in the strait after striking two naval mines, underscoring the vulnerability of this critical chokepoint. At the same time, refinery strikes in Russia have further constrained global refining capacity, pushing refined-product margins to new highs.
