Oil prices surged amid escalating Middle East tensions, following Iran’s ballistic missile attack on U.S. forces and subsequent retaliatory strikes by the U.S. and Saudi Arabia in Iraq.
The conflict has also seen reported “suspicious activity” in the Red Sea, raising further concerns about regional stability and oil supply security.
Oil prices experienced a significant surge in early Asian trading as geopolitical tensions in the Middle East intensified. Iran launched a ballistic missile attack on U.S. forces stationed in the region, prompting retaliatory strikes by U.S. and Saudi forces on Tehran-backed sites in eastern Iraq. This escalation has sent ripples through global energy markets, with Brent crude futures for September delivery climbing 3.42% to $86.97 a barrel, and U.S. West Texas Intermediate futures advancing 3.58% to $82.09 per barrel.
The U.S. Central Command confirmed the missile attack via a post on X, stating that Iran's Islamic Revolutionary Guard Corps was responsible for the attempted surprise assault. In response, U.S. and Saudi forces targeted "multiple terrorist logistics and weapons sites" in Iraq, as a retaliation for over 30 drone attacks conducted by "Iran-aligned terrorists" in the preceding three days.
Oil rose sharply in Asia trading, following renewed tensions in the Middle East after Iran launched an attack on American forces, while the U.S. along with the Saudis struck Tehran-backed sites in Iraq.
Futures for international benchmark Brent crude for September delivery gained 3.42% to $86.97 a barrel. U.S. West Texas Intermediate futures advanced 3.58% to $82.09 per barrel.
"Islamic Revolutionary Guard Corps forces launched multiple ballistic missiles from Iran in an attempted surprise attack on U.S. forces based in the Middle East," according to a post on X by the U.S. Central Command.
U.S. and Saudi forces also struck "multiple terrorist logistics and weapons sites" in eastern Iraq on Tuesday stateside, retaliating against more than 30 drone attacks in the past three days by "Iran-aligned terrorists," Centcom said.
Meanwhile, in the Red Sea, the U.K. Maritime Trade Operations Centre reported "suspicious activity." According to a post on X, the master of a tanker heard an explosion while transiting the southern Red Sea. While details remain scarce, the incident occurred on Monday and was highlighted in an advisory issued on Tuesday.
The region has been volatile, with Houthi attacks on Saudi oil facilities already raising concerns about supply disruptions. Experts warn that such attacks on oil production, storage, and port infrastructure could significantly impact regional supply chains. Additionally, analysts note that the recent spike in oil prices is partly influenced by broader market factors, including the U.S. Federal Reserve's monetary policy stance.
—CNBC's Lim Hui Jie contributed to the report.
Correction: This story was updated to fix delivery month for futures.
