Oil prices rose by approximately 2 per cent on Wednesday 15 July as escalating hostilities between the US and Iran heightened concerns about disruptions to global energy supplies.
Brent crude was trading at US$86.44 per barrel (bbl) at 08:06 GMT, up by US$1.71, or 2 per cent.
West Texas Intermediate (WTI) futures rose by US$1.43, or 1.8 per cent, to US$80.77/bbl, according to Reuters.
The gains followed Tuesday’s session, when oil prices settled at a one-month high, extending a rally that has been building as the conflict deepens.
The renewed volatility follows US President Donald Trump’s announcement of the reimposition of a naval blockade on all Iranian ports, a move that escalates existing measures targeting Iran’s oil exports.
The decision has rattled energy markets already on edge over the security of key shipping routes in the region.
In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) said it may close “all other export corridors that benefit the US and its allies”.
In a statement published by Iran’s state-owned Islamic Republic News Agency, the IRGC said: “Regional energy exports are either shared by all, or denied to all.”
The Strait of Hormuz, a critical maritime passage that carries nearly a fifth of the world’s oil and liquefied natural gas, has seen a heightened risk of disruption following direct attacks and threats connected to the conflict.
According to Reuters, analysts said Iran has been signalling that it may use its Houthi allies in Yemen to close the Bab el Mandeb gateway to the Red Sea, a move that could widen the confrontation with Washington and put two of the world’s most important energy corridors at risk simultaneously.
Tensions in the region have intensified since the collapse of a fragile truce in June, which triggered a fresh round of fighting between Iran and the US. Early on Wednesday, the US military confirmed a new wave of air strikes aimed at degrading Iranian capabilities used to target commercial shipping in the Strait of Hormuz.
Speaking in an interview aired on Fox News on Tuesday night, US President Trump said: “I will save the energy targets for last, but ultimately we will hit energy targets.”
Meanwhile, Goldman Sachs reported that Gulf exports had rebounded to more than 80 per cent of pre-war levels following a US-Iran memorandum of understanding reached in June, but have since fallen back to below 50 per cent, or around 11 million barrels per day, over the past week.
The bank warned that Brent prices could surpass US$110/bbl in the fourth quarter should the recovery of Gulf exports remain stalled.
Adding to signs of tightening supply, Brent crude futures for prompt delivery were trading at a US$8.92/bbl premium to contracts six months forward, the largest such margin since 10 June, Reuters reported.
This condition, known as backwardation, is typically regarded by traders as an indicator of tight near-term supply in the oil market, reinforcing concerns that further escalation could push prices significantly higher in the months ahead.