Oil jumped after US President Donald Trump called for the evacuation of Tehran before paring gains, with the market on edge about an escalation in the conflict with Israel that could disrupt crude supply.
Brent advanced as much as 2.2% before easing to trade above $73 a barrel, while West Texas Intermediate was near $72, after futures closed lower Monday on signs Iran was seeking a deescalation. Israel, however, has continued its attacks, which started Friday by targeting nuclear sites.
So far, Iran’s crude-exporting infrastructure has been spared and there are no signs that Tehran is seeking to escalate hostilities by disrupting flows through the Strait of Hormuz. Middle East producers ship about a fifth of the world’s daily output through the narrow waterway.
“It’s a jittery market but still not pricing in the worst-case scenarios on supply disruption,” said Vandana Hari, the founder of Vanda Insights in Singapore. “There could well be bigger strikes ahead, but that is still not changing the market’s calculus on supply risk, it seems.”
Most of the fallout has been confined to shipping since the conflict began on Friday. Navigation signals in Hormuz and the Persian Gulf are facing increasing interference that’s impacting positional reporting, according to the UK Navy, and some shipowners are reluctant to accept bookings in the region, citing safety concerns. Tanker rates also soared.
Oil prices still remains significantly higher than where they were before the attacks began, which prompted record volumes of producer hedging as well as futures and options changing hands. Morgan Stanley has hiked its price forecasts citing increased risk from the conflict.
Trump is set to abruptly depart the Group of Seven leaders’ summit in Canada, hours after he called for the evacuation. White House Press Secretary Karoline Leavitt said the president was leaving for Washington “so he can attend to many important matters,” and in a follow-up post on X said the departure was due to “what’s going on in the Middle East.”
Israel said its taken control over much of Iran’s airspace and severely damaged key facilities used in its missile and nuclear programs since the assault was launched on Friday, sparking fears of widening conflict in a region that produces around a third of the world’s crude.
With assistance from Rob Verdonck and Yongchang Chin.
This article was generated from an automated news agency feed without modifications to text.
