The Strait of Hormuz is widely recognized as a vital oil transit chokepoint. Situated between Iran and Oman, the waterway is a narrow but strategically important channel that links crude producers in the Middle East with key markets across the world.
The oil and natural gas markets have surged due to geopolitical uncertainty and market volatility, while the US dollar has hit strong resistance.
Oil edged lower in early Asian trade likely due to profit-taking.
Oil prices edged lower in early Asian trading hours on Tuesday as traders booked profits after prices rallied to their highest in over a month on Monday amid fears that the Middle East could be on the brink of a region-wide war.
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Oil futures added to last week's heavy gains as traders hedge against the possibility of Israel striking Iranian energy infrastructure in response to last week's missile attack.
Oil prices have surged amid escalating tensions in the Middle East, with traders hedging against a "worst-case scenario" that could see prices climb to $100 a barrel.
The crude oil market continues to rally overall, as the demand for oil, the geopolitical issues, and even yet another hurricane all come into the picture to suggest that supply could be threatened.
Alan Gelder, VP refining, chemicals and oil markets at Wood Mackenzie, discusses oil supply.
Crude oil prices surge as Middle East tensions escalate, pushing futures past $76. Traders eye $80, with OPEC+ supply in focus amid possible disruptions.
Helima Croft, Head of Global Commodity Strategy at RBC Capital Markets, highlights concerns about possible attacks on key oil infrastructure and the potential for price spikes if the conflict escalates.
Crude oil prices started the week off higher.