International oil prices rebounded sharply on Tuesday, just one day after a decline.
Investors, who had been reassured on Monday by reports that Iran was seeking negotiations with Israel through various channels, were seized with anxiety following U.S. President Donald Trump’s abrupt return to the U.S.
Trump’s decision to cut short his attendance at the G7 summit in Canada on Monday has raised speculation about potential developments.
There are growing concerns that the U.S. might directly participate in airstrikes against Iran, aligning with Israel’s wishes.
As Middle East tensions escalate once again, the oil market is on high alert.
Iran, the world’s third-largest oil producer with estimated reserves of 209 billion barrels, produces about 3.05 million barrels daily and exports between 1 and 1.5 million barrels.
Oil prices spiked due to fears that oil exports from Iran, the broader Middle East, and Arab nations could be disrupted.
Brent crude, the global oil benchmark, surged 2.11 USD (2.88%) to 75.34 USD per barrel for August delivery.
The U.S. benchmark, West Texas Intermediate (WTI), also jumped 2.09 USD (2.87%) to 73.83 USD per barrel for the July contract.
Last week, both Brent and WTI surged over 7% and recorded double-digit percentage gains following Israel’s surprise attack on Iran on June 13.
While considered unlikely, analysts warn that if Iran moves to block the Strait of Hormuz, oil prices could potentially exceed 120 USD per barrel.
