New Delhi: Oil prices surged by around 4% on Tuesday, reaching their highest levels in about a week as the renewed war between the United States and Iran raised concerns over disruptions to crude supplies from the Middle East.
Brent crude futures rose $3.44, or 3.8%, to $93.93 a barrel, while US West Texas Intermediate (WTI) crude gained $3.72, or 4.3%, to $89.48 a barrel.
The latest gains put Brent on track for its highest level since August 20 and WTI near its strongest level since July 23.
Market concerns have also grown over possible disruptions at refineries worldwide. Diesel prices have risen sharply in the Middle East and Russia, where Ukrainian attacks have also affected energy infrastructure. US diesel futures were trading near a 52-month high on Tuesday.
Analysts at Saxo Bank said the latest escalation had heightened concerns that energy supplies through the Strait of Hormuz could face prolonged disruption. Iran has reportedly closed the strategic waterway to shipping, raising concerns over the movement of oil and other energy products.
Markets await US crude inventory data
Oil traders are also closely watching the weekly inventory report from the American Petroleum Institute (API). Analysts expect energy companies to have drawn around 800,000 barrels of crude from storage during the week ended August 28.
If confirmed, it would mark the first decline in US crude inventories in five weeks.
The wider geopolitical situation has added to market uncertainty, with Russian airstrikes on Kyiv and surrounding areas also reportedly killing 12 people, further raising tensions.
