West Texas Intermediate (WTI) crude oil prices rebounded sharply, trading around $91.00 per barrel during Asian hours on Tuesday, after suffering over 9% losses the previous day. The recovery is driven by mounting supply concerns as US-aligned Gulf states, particularly Saudi Arabia, signal a shift toward direct military engagement in the Iran conflict. This escalation follows intensified attacks on critical energy infrastructure, raising fears of broader regional instability and supply disruptions [1].
The Wall Street Journal reported that Saudi Arabia may move toward more direct involvement, reflecting heightened anxiety among US partners in the region. The situation deteriorated further after Israel and the United States launched a new wave of strikes on Iran, with Israel confirming a second round of attacks targeting infrastructure in Tehran. In retaliation, Tehran has escalated attacks on Gulf neighbors and threatened to target power plants across the region if its own facilities face additional assaults [1].
On Monday, oil prices had declined after US President Donald Trump delayed planned strikes on Iranian energy infrastructure by five days, citing productive discussions with Tehran. However, Iranian officials, including Foreign Minister Abbas Araghchi and Parliament Speaker Mohammad Bagher Ghalibaf, denied any engagement or negotiations with Washington. Senior military adviser Mohsen Rezaei stated that the conflict would persist until Iran receives full compensation for damages incurred [1].
The ongoing conflict has disrupted the Strait of Hormuz, a vital chokepoint for global oil supply, through which approximately 20% of the world's oil typically flows. Middle Eastern producers have been forced to scale back output significantly. Despite the disruption, there are tentative signs of limited transit resuming, as some vessels have managed to pass through the strait under strict Iranian control, requiring permissions prior to transit. Kpler’s Amena Bakr reported that several LPG vessels successfully crossed the strait and are en route to India, indicating that while the passage is not fully closed, it remains highly restricted and subject to geopolitical risk [1].
Market participants remain highly cautious, with uncertainty surrounding the potential reopening of the Strait of Hormuz continuing to weigh on sentiment. The risk of further escalation and supply disruption is keeping oil prices elevated and volatility high [1].
CONCLUSION
WTI oil prices have surged near $91 per barrel as Gulf states edge toward direct involvement in the Iran conflict, intensifying supply concerns and disrupting the Strait of Hormuz. The market remains highly volatile, with ongoing geopolitical risks and uncertainty about the reopening of critical transit routes. Traders are closely monitoring developments, as further escalation could significantly impact global energy markets.