Global oil prices jumped more than five per cent on Tuesday, with Brent crude climbing above $95 per barrel as escalating hostilities between the United States and Iran raised fresh concerns about disruptions to crude supplies in the Middle East.
Brent crude, the global benchmark, rose 5.38 per cent to $95.36 a barrel, its highest closing level since July 24.
US West Texas Intermediate (WTI) also advanced 5.95 per cent to $90.86 per barrel, marking its highest close since July 23.
The sharp gains came as investors reacted to renewed military exchanges between Washington and Tehran and assessed the potential impact on oil production and transportation in the region.
The United States carried out fresh air strikes on Iranian targets on Tuesday, further escalating a conflict that has persisted for six months.
US President Donald Trump had a day earlier threatened additional strikes against Iran following renewed direct attacks between the two countries.
Trump also claimed that US air defence systems had intercepted all Iranian missiles capable of causing damage, while saying that Washington’s latest economic sanctions were having a significant effect on Tehran.
Iran subsequently launched overnight missile attacks against two US air bases in Jordan.
The attacks were carried out in retaliation for a US strike on Iran’s Larak Island, which Washington said was aimed at Iranian launchers allegedly being used to deploy mines in the Strait of Hormuz.
The Strait of Hormuz remains a critical artery for global energy supplies, with a substantial volume of the world's oil shipments passing through the waterway.
The renewed military confrontation has therefore heightened concerns in the oil market that any disruption to shipping through the strait or production facilities in the region could tighten global supplies and push prices even higher.
Traders are now watching developments between the two countries closely, with the direction of crude prices likely to remain sensitive to any further military escalation or signs of disruption to Middle Eastern oil exports.
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