Oil Rises for the Third Day as Washington Resumes Blockade on Iranian Shipments

SadaNews - Oil prices have risen for the third consecutive day after President Donald Trump threatened to launch further strikes, just hours after the United States resumed its blockade on Iranian shipments through the Strait of Hormuz.

Brent crude, the global benchmark, advanced towards $86 per barrel after jumping 11% in the previous two sessions, while West Texas Intermediate crude surpassed $80.

Trump told Fox News that the United States would continue to strike Iran and might target power stations and bridges next week unless Tehran comes to the negotiating table.

The U.S. Central Command announced in a statement on "X" that the United States wrapped up its strikes on Iran late Tuesday evening New York time, targeting dozens of military sites near the strait and along the Iranian coast.

It explained that the seven-hour operation aimed to undermine Tehran's ability to threaten commercial shipping and civilian crews.

The U.S. resumed its blockade at 4 PM Washington time, just an hour after launching new strikes aimed at weakening Iran's capabilities to attack commercial vessels in the strait. At the same time, Trump on Tuesday rolled back a plan announced a day earlier to impose a 20% tariff on shipments transiting the waterway.

The rollback was a welcome signal for shipping companies shaken by the collapse of the ceasefire between the U.S. and Iran and the potential for further disruptions in the world’s most vital energy corridor, through which about one-fifth of global crude oil and liquefied natural gas typically passes. It also highlighted the dilemma facing Trump as hostilities escalate with Iran and Tehran refuses to loosen its grip on the waterway, exerting upward pressure on oil prices.

Chris Weston, head of research at Pepperstone Group Ltd, said: "While crude oil is finding some balance after rising from around $70, crossing the Strait of Hormuz continues to require courage from ship owners, with the threat of attacks from Iran-aligned forces still very real."

He added: "The broader geopolitical backdrop continues to deteriorate, providing ongoing support for crude oil prices and keeping buyers poised to return to the market if prices head toward the $90 level."

Oil Prices Jump Amid Navigation Disruptions

Oil prices surged in recent days amid renewed fighting in the region, including attacks on oil-laden vessels and Gulf states such as Kuwait, leading to near-total navigation stoppage. Prices rose to their highest levels in about a month, recovering some of the roughly 30% drop in the second quarter, as the escalating conflict rekindled fears about supplies from the energy-rich region.

Over the past month, producers in the Arabian Gulf have begun to market additional quantities of crude oil after a temporary peace agreement eased fears about exports. The UAE, in particular, has successfully transported barrels using shuttle tankers sailing in darkness or with their transponders turned off.

At the same time, in an escalation of the conflict, the Iran-backed Houthi group in Yemen launched ballistic missiles and drones at Saudi Arabia, in the first major escalation since they agreed to a ceasefire in 2022. The Houthis have become an integral part of Iran's network of proxy armed groups across the Middle East.

Weston from Pepperstone Group noted that the recent developments, along with reports of recent attacks in Kuwait, Bahrain, and Jordan, confirm the expansion of the regional conflict, which does not encourage traders to rebuild structural short positions on crude oil.

Elsewhere, a sector-backed group reported that U.S. crude oil inventories fell by 600,000 barrels last week. This would mark the eleventh decline in twelve weeks if confirmed by official data on Wednesday.

Brent crude for September settled up 1.3% at $85.87 a barrel as of 10:35 AM Singapore time.

West Texas Intermediate crude for August delivery rose 1.1% to $80.20 a barrel.