Global energy markets remained volatile on Tuesday as escalating tensions in the Middle East continued to disrupt oil supply routes and trigger coordinated responses from governments and industry players.
Oil Prices Climb Amid Strait of Hormuz Disruptions
International benchmark Brent crude rose by 2.6 percent to $102.84 per barrel, while West Texas Intermediate (WTI) increased 2.4 percent to $95.77 in early trading. The price surge comes as traffic through the Strait of Hormuz a critical chokepoint handling roughly one-fifth of global crude oil remains severely disrupted due to ongoing hostilities.
Several countries have resisted calls by Donald Trump to assist in securing the strategic waterway, while Iran has intensified attacks on oil-producing neighbours, exacerbating market uncertainty.
Drone Attacks Target Key Oil Infrastructure
In the United Arab Emirates, a drone strike ignited a fire at the Shah oil field, located about 230 kilometres south of Abu Dhabi. Operated by Abu Dhabi National Oil Company (ADNOC), the field has a production capacity of approximately 70,000 barrels per day.
Meanwhile, in Iraq, two drones targeted the Majnoon oil field in the south. According to officials, one drone struck a telecommunications tower, while another targeted facilities linked to a US-based operator. No major damage was reported.
Shipping Activity Tentatively Resumes
Despite heightened risks, a Pakistani-flagged oil tanker successfully transited the Strait of Hormuz with its tracking system active, marking the first such journey by a non-Iranian vessel since the conflict intensified. Monitoring service Marine Traffic indicated the vessel was likely carrying a full load of crude.
Strategic Reserves and Supply Measures Activated
The International Energy Agency signaled readiness to release additional strategic oil reserves to stabilise markets. Executive Director Fatih Birol noted that over 1.4 billion barrels remain available across government and industry stockpiles, providing a buffer against prolonged disruptions.
In line with this strategy, Japan has already begun releasing oil from its strategic reserves, following a coordinated agreement among IEA member states earlier this month.
ADNOC Suspends Operations at Fujairah Terminal
ADNOC has also suspended oil loading operations at its Fujairah terminal, a key export hub near the entrance to the Strait of Hormuz. The move follows repeated strikes targeting oil storage facilities in the area, further tightening global supply.
العراق Seeks Alternative Export Routes
Amid constrained access to traditional export channels, Iraq is exploring alternative routes, including reviving a pipeline to Turkey. The proposed route could transport up to 250,000 barrels per day—significantly below Iraq’s pre-conflict export levels of approximately 3.5 million barrels per day.
Market Outlook
Analysts warn that continued instability in the Gulf region could sustain upward pressure on oil prices, with ripple effects across global inflation and energy security. Governments are expected to balance emergency interventions, including strategic reserve releases, with longer-term supply diversification strategies.
