Brent crude oil prices surged above $107 per barrel on Tuesday as escalating tensions between the United States and Iran intensified fears of prolonged disruptions to global energy supplies through the strategically vital Strait of Hormuz.
International benchmark Brent North Sea crude rose 3.4 per cent to settle at $107.77 a barrel, while US benchmark West Texas Intermediate jumped 4.2 per cent to $102.18.
The rise in oil prices came after Iran’s chief negotiator Mohammad Bagher Ghalibaf warned that the United States must accept Iran’s latest peace proposal, saying continued disagreements would only lead to more failed negotiations.
US President Donald Trump, who is travelling to Beijing for talks with Chinese President Xi Jinping, maintained a firm stance on Iran despite expressing optimism about his discussions with China.
Market concerns have centred on the continued restrictions affecting tanker traffic through the Strait of Hormuz, one of the world’s most important oil transit routes. Traders fear prolonged disruptions could tighten global energy supplies and increase inflationary pressure worldwide.
The latest US inflation data added to those worries. Official figures showed the Consumer Price Index rose 3.8 per cent year-on-year in April, largely driven by higher energy costs. Analysts said the inflation spike could reduce the chances of interest rate cuts by the US Federal Reserve later this year.
While oil prices surged, global stock markets mostly weakened. Major indices in Europe closed lower, while Wall Street ended mixed as investors weighed geopolitical uncertainty alongside inflation concerns.
Analysts said markets remain cautiously optimistic that diplomatic negotiations could eventually ease tensions, but uncertainty surrounding the Middle East conflict continues to dominate energy markets.
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