Oil prices seesawed on Tuesday as market participants evaluated the likelihood of US President Donald Trump potentially ending military actions against Iran, in contrast with the ongoing impact of the Strait of Hormuz’s partial closure.
By 06:55 GMT, Brent crude futures for May increased by $0.65 to $113.43 per barrel, after swinging between a 2% gain and a 1% loss during the session, reported Reuters.
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The May contract is set to expire on Tuesday, while the June contract stood at $107.31.
Meanwhile, US West Texas Intermediate (WTI) futures for May edged up $0.02, or 0.02%, to $102.90 a barrel, rebounding from earlier losses to reach their highest level since 9 March.
Citing undisclosed administration officials, The Wall Street Journal reported that Trump has indicated to aides his willingness to cease military efforts against Iran, even if the Strait of Hormuz remains largely blocked, opting to address its reopening at a later time.
On Monday, Trump threatened severe action against Iran, including targeting its energy facilities if Tehran fails to reopen the crucial waterway.
The effective blockage of the Strait of Hormuz by Iran has driven Brent futures up by 59% in March, a record monthly increase, while WTI has risen by 58%, marking the highest surge since May 2020. The passage is responsible for about one-fifth of global oil distribution and significant liquefied natural gas (LNG) transport.
Amidst these tensions, Kuwait Petroleum reported that its crude oil tanker Al Salmi was hit by an alleged Iranian attack in a Dubai port.
Furthermore, Yemen’s Houthi forces aligned with Iran targeted Israel with missiles on Saturday, heightening concerns over disruptions to the Bab el-Mandeb strait. This strategic channel links the Red Sea and Gulf of Aden and is pivotal for shipping between Asia and Europe through the Suez Canal.
In response to these developments, Saudi Arabia has rerouted its crude exports via the Red Sea port of Yanbu from the Gulf with shipments reaching 4.658 million barrels per day last week, a significant increase from January and February averages of 770,000 barrels per day (bpd) as per Kpler data.
