Oil prices advanced for the fourth trading day in a row on Tuesday as market participants weighed supply constraints linked to the widening conflict in the Middle East.
Brent crude for May delivery increased $2.26, or 2%, to $115.04 a barrel at 0002 GMT, after having hit its strongest level since March 19 in the previous session. The May contract was set to expire on Tuesday; the more actively traded June contract stood at $108.96 a barrel.
U.S. West Texas Intermediate (WTI) futures for May rose $3.10, or 3%, to $105.96 a barrel, a level not seen since March 9. The price moves came as traders digested reports that Iran has effectively closed the Strait of Hormuz - a waterway that typically carries about a fifth of the world's oil and substantial volumes of liquefied natural gas tankers.
That disruption has been one of the key drivers behind the month-to-date rallies: Brent is up 59% so far in March, marking its largest monthly advance on record, while WTI is higher by 58% for the month, its biggest monthly rise since May 2020.
The conflict has also been linked to specific incidents involving tankers and the potential for oil spills. Kuwait Petroleum Corp said on Tuesday that its fully loaded crude oil tanker Al Salmi - a vessel capable of carrying up to 2 million barrels - was struck by what was described as an alleged Iranian attack while at Dubai port, the state news agency KUNA reported. Officials cautioned that the strike created a risk of oil contamination in the area.
Additional concerns emerged after Yemen's Iran-aligned Houthi forces fired missiles toward Israel on Saturday. Market participants flagged the heightened risk of disruptions to the Bab el-Mandeb strait - the narrow passage linking the Red Sea and the Gulf of Aden that serves as a principal route for shipping between Asia and Europe via the Suez Canal.
"If the Houthis successfully resume a blockade of the Bab al-Mandab Strait, both of the world’s most critical energy arteries would be under simultaneous pressure. This 'twin chokepoint' crisis is a nightmare scenario for global supply chains," said Tim Waterer, chief market analyst at KCM Trade.
Evidence of route adjustments by major oil producers has already appeared in export patterns. Kpler data showed that Saudi crude exports redirected from the Gulf to the Red Sea port of Yanbu reached 4.658 million barrels per day last week, a marked increase from an average of 770,000 barrels per day in January and February.
Political rhetoric has also intensified the market reaction. On Monday, U.S. President Donald Trump warned that the United States would "obliterate" Iran's energy plants and oil wells if Tehran did not reopen the Strait of Hormuz. The statement followed Tehran's rejection of U.S. peace proposals as "unrealistic" and came on the heels of Iranian missile strikes on Israel.
At the same time, White House officials said on Monday that diplomatic engagement with Iran is ongoing and progressing, and that private communications from Tehran have differed from its public statements.
"The markets do not see any offramp for the conflict as the two sides are very wide apart in terms of their demands despite the rosy picture that President Trump is painting," said Edward Meir, an analyst at Marex.
Traders and industry watchers are assessing how persistent constraints on maritime routes and episodes of direct damage to vessels could translate into near-term supply shortfalls and price volatility. The situation remains fluid as military, commercial and diplomatic developments continue to shape risk assessments across oil, shipping, and related markets.
Summary - Oil benchmarks rose for a fourth straight day amid reports of attacks on tankers, effective closure of the Strait of Hormuz and increased threat to the Bab el-Mandeb strait, driving Brent and WTI toward unusually large monthly gains.
Key sectors impacted - Energy producers and exporters, global shipping, LNG transport, refining and international trade logistics.