Oil prices rose on Tuesday as US President Donald Trump reimposed a naval blockade on all Iranian ports, against a backdrop of escalating disruption in the Strait of Hormuz.
During trading, Brent crude climbed 58 cents, or 0.7%, to $85.31 a barrel, while West Texas Intermediate added 35 cents, or 0.4%, to $79.69 a barrel.
Oil prices settled around 2% higher, reaching their highest level in a month, as supply disruption through the Strait of Hormuz deepened. Approximately one-fifth of the world's oil and liquefied natural gas supplies passed through the strait before the war broke out.
"Brent and WTI have seen upward corrections in line with the escalating attacks, but the magnitude of these moves is likely to slow now as the market awaits any change in stance from either the United States or Iran," said Jun Gue, senior oil analyst at Sparta Commodities.
"While the physical oil market is still adequately supplied, any further escalation related to the Strait of Hormuz or additional sanctions on Iranian exports could quickly weigh on market sentiment and add further risk premiums," said Priyanka Sachdeva, senior market analyst at Philip Nova.
"I'll hold off on targeting energy sites until the end, but we will hit them eventually," Trump said in an interview with Fox News that aired Tuesday evening.
Separately, the head of a Japanese industry group said oil refining companies in Japan will move to diversify supply sources while exploring ways to support oil producers in the Middle East, including pipeline expansion projects that bypass the Strait of Hormuz.
"It is necessary to find practical alternatives for crude oil transported through the Strait of Hormuz, rather than simply finding alternatives for oil imports coming from the Middle East," Shunichi Kito, chairman of the Petroleum Association of Japan, said at a press conference.
Kito, who also serves as chairman of refiner Idemitsu Kosan, said US crude is one of the diversification options.
He noted that given the current configuration of Japanese refineries, which are better suited to Middle Eastern crude grades, it is difficult at present to handle large volumes of US crude oil.
Kito expressed hope that an energy resilience package of measures, due to be finalised by the end of August, would help ensure stable energy supplies while enhancing industrial competitiveness.
He said the oil sector, drawing on lessons learned from the Iran war, would seek to strengthen supply chains by deepening ties with oil-producing nations, securing tanker capacity, and improving refinery flexibility.