Tuesday saw a dramatic increase in oil prices due to escalating tensions in the Middle East, as fears of disruption in the vital Strait of Hormuz shipping route were heightened by military skirmishes and strikes connected to Iran.
The US benchmark West Texas Intermediate closed 4% higher at $106.42 per barrel, while the international benchmark Brent crude closed at $114.44 per barrel, up about 6% on the day. By 7:20 am IST, WTI crude was at 104.7, down 1.68 or 1.58%, while Brent crude was at 113.7, down 0.79 or 0.69%.
This comes after a drone struck the largest oil storage facility in the United Arab Emirates, the Fujairah Oil Industry Zone. The incident was the first of its sort in the region since the ceasefire on April 7, according to Emirati officials, who accused Iran for it. Oil prices momentarily surged to $126 per barrel last week, the highest level in four years.
When US Central Command reported that American Army helicopters killed six Iranian military speedboats after they threatened ships in the strait, military tensions escalated even more. Additionally, according to CENTCOM, US Marines escorted two US-flagged ships through the strategic area while fending off Iranian drones, missiles, and small boats.
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