Oil prices surged by over $1 in early Asian trading on Tuesday, rebounding from the previous session’s losses as mounting concerns over potential disruptions to Middle East oil supplies overshadowed fears of a looming U.S. recession that could dampen demand in the world’s largest oil consumer.
The surge in prices came after several U.S. personnel were injured in an attack on a military base in Iraq on Monday. The incident, reported by three U.S. officials to Reuters, has heightened regional tensions following the recent killings of senior figures from militant groups Hamas and Hezbollah.
U.S. West Texas Intermediate (WTI) crude futures saw a notable increase of $1.18, or 1.6%, reaching $74.12 per barrel by 1022 GMT, reflecting the anxiety over supply disruptions.
This rise in oil prices contrasts with Monday’s market performance, where both WTI and Brent benchmarks fell by 0.7-0.8% amid a broader selloff in global stock markets. The decline was curbed by concerns that Iran might retaliate for the assassination of a Hamas leader in Tehran, potentially escalating the conflict into a wider war in the Middle East.
Adding to the geopolitical complexity, a senior ally of Russian President Vladimir Putin arrived in Tehran on Monday for discussions with Iranian leaders, including the president and top security officials. This visit underscores the Islamic Republic’s strategic deliberations in response to the assassination.
Meanwhile, Israeli Prime Minister Benjamin Netanyahu is facing significant backlash both domestically and internationally over his handling of the Gaza ceasefire talks, which have stalled. Three Israeli officials indicated that there are rising fears that the crisis could escalate into a full-blown conflict with Iran.
As the situation develops, the oil market remains on edge, with traders closely monitoring geopolitical events that could further influence supply dynamics and price movements.