• WTI advances due to resumed US-Iran strikes and threats to Kharg Island, sparking intense energy supply concerns.
• A supertanker mine strike highlights severe operational risks in the Strait of Hormuz.
• Ukrainian strikes on Russian refineries further tighten fuel supplies, pushing margins to record highs.

West Texas Intermediate (WTI) oil price gains ground for the second successive day, trading around $85.60 per barrel during the Asian hours on Tuesday. Crude oil prices are climbing following a fresh wave of hostilities in the Middle East that has renewed fears over potential disruptions to regional energy flows.

The escalation broke a month-long lull as US forces targeted Iranian rocket launchers on Larak Island, prompting Tehran to strike targets in the UAE and Jordan. Escalating the rhetoric, President Donald Trump warned of potential military action against Kharg Island, which serves as Iran’s primary oil export hub.

Maritime risks in the region were highlighted when a supertanker caught fire after striking two naval mines in the Strait of Hormuz. Despite these severe hazards, crude shipments through the critical choke point have not ground to a complete halt, with major Gulf producers, including Saudi Arabia, the UAE, Kuwait, and Iraq, continuing to ship partial volumes.

Compounding the pressure on global energy markets, drone and missile strikes on Russian refineries have squeezed overall refining capacity. This reduction in fuel processing capabilities, combined with Middle Eastern supply anxieties, has driven refined-product margins to new record highs.

US–Venezuela oil deal claims add to energy market uncertainty

BNY’s Wee Khoon Chong highlights that President Trump has injected a fresh source of uncertainty into energy markets by announcing that the US has struck a deal with Venezuela “to secure majority control of more than 65 billion barrels of oil reserves.” Chong notes that Trump has framed the agreement as coming at “no cost” to US taxpayers and has claimed it would “strengthen bilateral ties while helping to lower gasoline prices.” However, Chong points out that the lack of detail on the legal terms and implementation, set against already elevated energy costs and tighter global crude flows, leaves investors cautious about how and when any purported benefits might feed through to the market.