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Oil steadied after Monday\u2019s jump, as traders tracked the increasingly fragile four-week ceasefire in the Middle East following fresh clashes between the US and Iran.<\/p>\n
Brent edged below $114 a barrel, after surging 5.8% on Monday. Hundreds of vessels were seen clustering near Dubai on Tuesday, as more ships moved away from a still-empty Strait of Hormuz in response to Iran\u2019s efforts to widen its area of control. In the United Arab Emirates, an oil terminal in Fujairah was hit.<\/p>\n
The two sides exchanged fire as the US said it had opened a passage through the waterway and CBS reported two American destroyers had crossed into the Persian Gulf.<\/p>\n
The attacks \u201call point to the ceasefire fraying,\u201d said Saul Kavonic, senior energy analyst at MST Marquee. \u201cOil could jump materially higher if the war resumes and especially if damage to more oil infrastructure ensues.\u201d<\/p>\n
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President Donald Trump said the war may last another two to three weeks in comments to Salem News Channel. Defense Secretary Pete Hegseth will brief reporters at the Pentagon later Tuesday, with General Dan Caine, chairman of the Joint Chiefs of Staff.<\/p>\n
Brent crude has rallied by more than 80% this year as the conflict deprived the market of hundreds of millions of barrels of oil. Access to the critical strait is subject to a double blockade, with Tehran seeking to prevent ships from transiting, while Washington stops Iran\u2019s oil from reaching global markets.<\/p>\n
Iranian Foreign Minister Abbas Araghchi said talks with Washington were \u201cmaking progress\u201d but the US and the UAE \u201cshould be wary of being dragged back into quagmire,\u201d according to a post on X. Events in Hormuz made clear \u201cthere\u2019s no military solution to a political crisis,\u201d he added.<\/p>\n
\u201cI\u2019m not expecting a quick reopening of bi-directional flows through the strait,\u201d said Anoop Singh, global head of shipping research at Oil Brokerage. \u201cThe US is attempting to level the power balance in the strait, and that\u2019s been reciprocated against by Iran. It\u2019s escalation.\u201d<\/p>\n
Adding to tensions on Monday, the UAE said it intercepted Iranian cruise missiles and blamed a drone strike for a large fire at Fujairah port, a key terminal that sits outside the Persian Gulf. The Gulf state issued several missile alerts to its residents for the first time since the ceasefire between Washington and Tehran began nearly a month ago.<\/p>\n
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\u201cEscalation seems to be the path,\u201d said Carl Larry, oil and gas analyst at Enverus. \u201cPeace is dimming, and what happens during an escalation is anyone\u2019s guess, but it won\u2019t be good.\u201d<\/p>\n
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