Oil prices experienced an uptick for the fourth consecutive day on Tuesday, with Brent crude on track for its most significant monthly increase on record and U.S. crude futures positioned for their highest monthly rise since 2020, driven by supply constraints stemming from the escalating conflict in the Middle East. Brent crude futures for May increased by $2.26, representing a 2% rise, reaching $115.04 per barrel at 0002, following a peak not seen since March 19 in the previous session. The May contract is set to expire on Tuesday, while the more actively traded June contract was priced at $108.96. The United States West Texas Intermediate futures for May increased by $3.10, or 3%, reaching $105.96 a barrel, marking its highest level since March 9.

The effective closure of the Strait of Hormuz by Iran, a critical passageway for approximately one-fifth of the global oil supply and significant volumes of liquefied natural gas tankers, has resulted in a remarkable 59% increase in Brent futures in March, marking the highest monthly gain on record. Meanwhile, WTI has experienced a 58% rise this month, the most substantial increase since May 2020. Kuwait Petroleum Corp has underscored the risks to maritime energy supplies stemming from the ongoing conflict involving Iran, the United States, and Israel. On Tuesday, it is reported that the fully loaded crude oil tanker Al Salmi, with a capacity of up to 2 million barrels, was reportedly hit by an Iranian attack at Dubai port. Officials have issued warnings regarding the potential for oil spills in the region.

On Saturday, Yemen’s Iran-aligned Houthi forces launched missiles at Israel, heightening apprehensions regarding potential disruptions to the Bab el-Mandeb strait, a critical chokepoint that connects the Red Sea and Gulf of Aden, serving as a vital route for maritime traffic between Asia and Europe through the Suez Canal. “If the Houthis successfully resume a blockade of the Bab al-Mandab Strait, both of the world’s most critical energy arteries would be under simultaneous pressure. This ‘twin chokepoint’ crisis represents a significant challenge for global supply chains,” stated Tim Waterer. Saudi crude exports have been redirected through this route, with volumes shifted from the Gulf to the Red Sea port of Yanbu reaching 4.658 million barrels per day last week, according to data, marking a significant increase from an average of 770,000 bpd in January and February.

U.S. President Donald Trump issued a stark warning on Monday, stating that the U.S. would “obliterate” Iran’s energy facilities and oil wells should Tehran fail to reopen the Strait of Hormuz. This came after Tehran characterized U.S. peace proposals as “unrealistic” and conducted recent missile strikes on Israel. Still, the White House said on Monday that talks with Iran were continuing and progressing well, adding that what Tehran says publicly differs from what it tells U.S. officials in private. “The markets do not perceive any exit strategy for the conflict, as the two parties remain significantly divergent in their demands, notwithstanding the optimistic portrayal by President Trump,” stated Marex analyst Edward Meir.