Global oil prices remained elevated on Tuesday, with Brent crude holding near the $114-per-barrel mark after a sharp surge in the previous trading session, as renewed military escalation between the United States and Iran injected fresh uncertainty into energy markets and raised fears over supply disruptions in the Middle East.

Brent crude futures climbed roughly 6% on Monday before stabilising, while West Texas Intermediate hovered just below $105 a barrel. Traders said the sustained “war premium” reflects heightened concern over the security of global oil flows, particularly through the Strait of Hormuz, a critical chokepoint for a significant share of the world’s seaborne crude shipments. Any prolonged disruption in the corridor has historically triggered volatility in global energy benchmarks.

The latest spike in prices followed reports from US Central Command indicating that American naval forces had engaged and repelled Iranian attacks while escorting two US-flagged vessels through the region. At the same time, reports of a strike on oil infrastructure near the Fujairah Oil Industry Zone in the United Arab Emirates added further pressure on markets already sensitive to supply risks. The incident underscored the vulnerability of regional energy assets amid escalating hostilities.

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In a parallel development, US President Donald Trump warned that the confrontation could continue for several weeks, cautioning that any direct targeting of US ships would invite severe consequences. His remarks signalled a hardening stance from Washington as it seeks to maintain secure maritime corridors while attempting to deter further escalation in the Gulf region.

Iranian officials pushed back against the rhetoric, with Foreign Minister Abbas Araghchi stating that diplomatic discussions were still “making progress” but warning external actors against deepening the crisis. Tehran has maintained that it does not seek wider conflict, while simultaneously criticising what it describes as militarised enforcement actions in contested waters. The diplomatic exchange highlights the fragile nature of ongoing ceasefire arrangements.

Market analysts, including those from Goldman Sachs, noted that while global crude inventories remain above critical thresholds, the pace of stock drawdowns is accelerating. Total global oil inventories are estimated at around 101 days of demand but are projected to decline further in the coming months. The bank also warned that tighter availability of refined products such as jet fuel and naphtha, combined with regional export disruptions, could sustain price volatility if geopolitical tensions persist.

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