Oil prices rose further on Tuesday as Brent crude prices increased by 3.2% to $80 (£59.67) a barrel, while US-traded oil rose 2.6%. This follows a sharp increase in oil prices on Monday following attacks on Iran by the US and Israel.
This comes after an Iranian official said his country would “set fire to anyone who tries to pass through” the Strait of Hormuz as the conflict between his country and the US and Israel continued.
Ebrahim Jabbari, an adviser to the commander-in-chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), told state TV that said ships “should not come to this region. They will certainly face a serious response from us”.
Strait of Hormuz
Shipping through the Strait of Hormuz, which is at the centre of this conflict, is crucial to the global economy, with about 20% of the world’s oil and gas passing through the waterway. But they have come to a halt after several vessels were attacked in recent days.
As well as pushing up prices on global energy markets, the conflict has triggered a rise in how much it costs to transport oil.
Crude oil prices could pass $100 a barrel if the disruption to shipments is prolonged, Srinivaasan Balakrishnan from risk research firm Avellon Intelligence said. He predicted that if it held at that level US petrol prices could rise by up to 25 cents a gallon.
US President Trump is facing concerns that the conflict in the Middle East in the region could push up the cost of living.
He is scheduled to meet Treasury Secretary Scott Bessent and Energy Secretary Chris Wright on Tuesday to discuss the issue.
Secretary of State Marco Rubio said Washington will announce plans to deal with rising energy prices.
“We knew that going in would be a factor,” Rubio said. “Starting tomorrow you will see us rolling out those phases to try to mitigate against that.”
