Oil prices, specifically Brent crude, rose on Tuesday after US military strikes in southern Iran, reversing a significant 7 per cent drop from the previous day. The earlier fall in crude prices on Monday was attributed to positive developments in peace talks between the US and Iran, which had briefly raised hopes for a resolution.
US Military Action
US Central Command confirmed its forces targeted missile launch sites and Iranian boats near the Strait of Hormuz, stating the action was to protect US troops. These military actions have subsequently cast a shadow over the ongoing negotiations, which have a history of appearing close to a breakthrough only to collapse.
Impact on Global Markets
The closure of the Strait of Hormuz by Tehran has severely disrupted global oil and gas flows, leading to a substantial increase in prices and prompting warnings from the International Energy Agency. The renewed hostilities have shattered hopes for an imminent peace deal, causing uncertainty in energy markets.
