Crude oil prices surged back above $98 a barrel on Tuesday following fresh skirmishes between Iranian and US forces in the Strait of Hormuz. Brent crude was trading at $98 per barrel, while West Texas Intermediate (WTI) stood at $91, recovering part of the sharp decline witnessed on Monday when prices shed nearly 8.5 per cent.
The skirmishes have raised fresh uncertainty in global oil markets that had begun pricing in a possible easing of tensions between the two sides.
The sharp rebound came even as the two nations are engaged in diplomatic talks in Qatar while simultaneously clashing in the Strait of Hormuz.
Crude oil disruptions have triggered uncertainty and austerity measures in major oil-importing Asian economies like India, Japan, South Korea and Taiwan, where rising fuel prices have put additional burden on their economies.
The Indian government, in particular, had issued fresh austerity measures to tackle rising fuel and energy prices.
However, prices continue to rise, putting additional pressure on the pockets of the common man.
Crude prices had slumped on Monday after Donald Trump said negotiations with Iran were “proceeding nicely", while Pakistan’s military chief reportedly told Chinese officials that a deal could be close.
The Strait of Hormuz remains central to the global energy outlook. Before the conflict, the narrow shipping corridor handled roughly a fifth of global oil and liquefied natural gas flows.
Although prices rallied sharply in March and April amid supply disruption fears, crude is still on track for a monthly decline as traders weigh ceasefire hopes against continued geopolitical risks and falling inventories.
Also read: Crude drops below USD 100 per barrel; Sensex climbs 1k pts
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