London: Oil prices rose on Tuesday as renewed fighting between the United States and Iran increased fears of further disruption to commercial shipping and oil supplies through the Strait of Hormuz.
Brent crude, the international oil benchmark, rose above $91 a barrel, while US West Texas Intermediate crude traded above $87 a barrel. Brent had gained more than 2.5 percent on Monday after the latest military confrontation between the two countries raised concerns about the future of shipping through the strategic waterway.
The latest rise followed direct military exchanges on August 30, the first such exchange between the United States and Iran in more than a month.
US forces struck two Iranian rocket launchers on Larak Island in the Strait of Hormuz. A US official said the launchers were being prepared for operations involving sea mines that could threaten shipping.
Iran responded by launching missiles at two locations used by US forces in Jordan, according to Iranian reports. Jordan's armed forces said its air defences intercepted eight missiles that entered Jordanian airspace.
The latest exchange has increased fears that the conflict could again threaten commercial vessels using the Strait of Hormuz.
The concerns were reinforced by a new incident involving a tanker near the waterway.
The United Kingdom Maritime Trade Operations agency said on Tuesday that a tanker reported being struck by three unknown projectiles while completing an outbound transit of the Strait of Hormuz.
The incident occurred about 17 nautical miles east of Khasab in Oman. No casualties or environmental impact were reported, and authorities were investigating the incident.
The UK maritime agency did not identify the tanker or say who was responsible for the projectiles. Vessels in the area were advised to proceed with caution.
The incident therefore cannot currently be described as a confirmed Iranian attack.
Shipping through the Strait of Hormuz remains far below normal levels. Preliminary ship tracking data showed only five commodity vessels transited the strait on Monday, compared with a 10 day average of about 14 vessels.
Four vessels entered the waterway and one left it. No liquid tankers were among those counted.
The figures do not include vessels that have switched off their tracking signals, meaning the actual number of vessels using the strait could be higher.
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and is one of the world's most important energy routes. About one fifth of global oil supplies normally pass through the waterway during peacetime.
The disruption has sharply reduced the amount of oil moving through the strait. The continuing uncertainty has affected oil prices, shipping companies and governments that depend on stable energy supplies.
Iran and Oman have also been working on arrangements intended to improve navigation through the waterway. The two countries have discussed a temporary navigation corridor and measures to clear mines from parts of the strait.
However, the latest military escalation has raised new questions about whether such arrangements can provide stable and safe passage for commercial vessels.
The International Maritime Organization has warned about the wider risks to seafarers and shipping. It said on August 28 that at least 70 attacks on international shipping had been verified since the conflict began and that 19 seafarers had been killed.
The organisation also said up to 400 ships carrying about 6,000 seafarers had been unable to safely leave the Persian Gulf.
The crisis is therefore affecting more than the oil market. Shipping operators face continuing security risks and uncertainty over whether vessels can safely travel through the Strait of Hormuz.
The renewed fighting has also raised questions about the future direction of the conflict.
US President Donald Trump has threatened further strikes against Iran following the Iranian missile attacks. Iran has said it would respond to further US attacks.
It remains unclear whether the latest exchange will remain limited or develop into a wider escalation.
For oil markets, the immediate concern is whether further military action will reduce shipping through the Strait of Hormuz even more. Any prolonged disruption could put additional pressure on oil supplies and create further upward pressure on prices.
For now, the renewed military exchanges, the tanker incident and the continuing low level of shipping traffic have increased uncertainty around one of the world's most important energy routes.