The Brent crude futures contract was up $1.17, or 1.6%, at $74.4 a barrel as at 0005 GMT and U.S. West Texas Intermediate crude was up $1.34, or 1.87%, at $73.11 – both having risen more than 2% earlier in the trading session.
Both contracts settled more than 1% lower on Monday on hope of easing geopolitical tension after media reports of Iran seeking an end to hostilities.
However, the conflict took a turn for the worse on its fifth day on Tuesday as Iranian media reported explosions and heavy air defence fire in the capital Tehran. Over in Israel, air raid sirens sounded in Tel Aviv in response to Iranian missiles.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries. Hostilities could disrupt its supply of oil and thereby increase prices.
On Monday, an Israeli strike hit Iran’s state broadcaster and the head of the U.N. nuclear watchdog also indicated extensive damage to Iran’s biggest uranium enrichment plant. Trump said Iran should have signed a nuclear deal with the U.S. before Israeli strikes began and that he believes Iran now wants to reach an agreement. Easing of U.S. sanctions as part of any deal would allow Iran to export more oil, weighing on global crude prices.
Elsewhere, OPEC and allies including Russia – or OPEC+, which pumps about half of the world’s oil – said on Monday it expected the global economy to remain resilient in the second half of the year. It also trimmed its forecast for growth in oil supply from the U.S. and other non-OPEC+ countries in 2026.
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