Oil prices rise after renewed US-Iran tensions trigger concerns over supply risks, inflation and global market stability

Global oil markets moved sharply higher on Tuesday after renewed hostilities between the United States and Iran intensified concerns over energy supplies, inflation risks and the stability of a fragile ceasefire.

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Crude prices climbed after new US strikes on Iran followed an Iranian attack on a commercial vessel in the Strait of Hormuz, one of the world’s most important oil shipping routes.

The waterway, located between Iran and Oman, handles about one-fifth of global oil shipments, making any disruption there a major concern for energy markets and economies worldwide.

The latest escalation began after Iranian forces struck a commercial ship early on Sunday and announced the closure of the strait. The United States responded with strikes on locations in Iran, while Tehran launched attacks on targets in Bahrain, Jordan, Kuwait and Oman.

President Donald Trump had warned before the latest strikes that the US response would be severe.

“We’re going to hit them very hard tonight, and we’re going to hit them hard tomorrow,” Trump told conservative radio host Hugh Hewitt.

The US president later said on Truth Social that America would be known as the “Guardian of the Hormuz Strait” and announced plans for a 20 per cent fee on cargo moving through the waterway, while also indicating that a diplomatic solution remained possible.

“Yeah, I think a deal is possible. Sure, I do,” Trump told reporters at the White House.

The renewed tensions have driven the US Iran oil tensions story back to the centre of investor concerns, with traders watching closely for signs of further disruption to energy supplies.

Oil prices jumped more than nine per cent on Monday before extending gains on Tuesday, with West Texas Intermediate rising 2.6 per cent to $80.15 per barrel and Brent crude increasing 2.4 per cent to $85.37 per barrel.

BNZ strategist Jason Wong questioned whether the proposed shipping fee would become permanent, describing it as a possible negotiating tactic aimed at pressuring Iran to stop attacks on shipping in the region.

“The 20 per cent levy would add about $16 to the cost of every barrel of oil passing through the strait on a typical supertanker,” Wong said.

The latest market movement has revived concerns that higher energy prices could push inflation upward and complicate decisions by central banks, including the US Federal Reserve.

Fed Governor Christopher Waller warned that another strong inflation reading could force policymakers to consider tighter monetary policy.

“If we get another hot reading on core inflation this week, then the committee will need to consider tightening monetary policy in the near term,” Waller said.

Equity markets showed some resilience despite the uncertainty. Asian shares mostly recovered after recent losses linked to concerns about excessive valuations in artificial intelligence-related companies.

South Korea’s Kospi gained 0.7 per cent after significant swings, while Japan’s Nikkei 225, Hong Kong’s Hang Seng Index and Shanghai’s Composite Index also recorded gains.

However, European markets opened lower, reflecting continued caution ahead of major economic data releases, corporate earnings and Federal Reserve developments.

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Analysts said investors would continue monitoring developments in the Middle East, particularly the situation around the Strait of Hormuz, as any prolonged disruption could have wider consequences for energy costs, inflation and global economic growth.