Oil Prices Climb as Iran Threatens Gulf Energy Infrastructure

Oil prices extended their rally on Tuesday as escalating U.S.-Iran tensions fueled concerns over potential disruptions to Middle East energy supplies and shipping through the Strait of Hormuz.

Brent crude futures climbed about 0.1% to $97.20 per barrel, remaining firmly above the $97 level. U.S. West Texas Intermediate (WTI) crude futures gained roughly 1% to $92.38 a barrel. Brent had settled nearly 1% higher on Monday after briefly approaching $98 in the previous session.

The latest oil price gains followed a weekend of retaliatory strikes between the United States and Iran, including attacks involving shipping. Iranian officials subsequently warned that U.S.-linked oil and gas operations, along with other energy infrastructure throughout the Gulf, could become targets if attacks on Iranian assets continue.

Iranian Parliament Speaker Mohammad Baqer Qalibaf said oil and gas facilities in the region remain exposed and warned that strikes against Iranian assets would trigger retaliation.

The Strait of Hormuz has consequently emerged as a major focus for global oil markets. The strategic waterway is a critical route for international energy shipments, meaning tighter controls or prolonged disruption could affect crude oil supplies and put additional upward pressure on prices.

Iran has announced plans for a new restricted zone in the Gulf alongside an alternative shipping corridor. The measures have raised concerns that increased maritime restrictions could further reduce tanker traffic through Hormuz and complicate energy transportation.

Diplomatic developments have provided some relief to markets. Tehran said it was nearing an agreement with Oman regarding arrangements for the Strait of Hormuz, potentially creating a framework to reduce shipping disruptions.

However, investors remain cautious about whether diplomatic efforts can quickly resolve the broader U.S.-Iran conflict. Continued threats against Gulf energy infrastructure and uncertainty surrounding shipping routes are keeping a geopolitical risk premium embedded in crude prices.

The escalating conflict has already delivered substantial gains for oil. Brent crude jumped about 8% last week, while WTI surged nearly 10%, highlighting growing market concerns about Middle East supply risks.