Oil Prices Climb as Strikes Hit Energy Infrastructure

By Abah Margaret

Global oil prices rose on Tuesday following renewed attacks on key energy infrastructure across the Middle East, heightening concerns over supply disruptions and inflation risks.

The rebound comes after a sharp decline in the previous session, when the head of the International Energy Agency indicated that strategic stockpiles could be released if necessary to stabilise the market.

Investor sentiment, however, remained mixed. While geopolitical tensions intensified, global equity markets recorded modest gains, supported by strong corporate earnings. U.S. chip giant Nvidia projected revenues of at least $1 trillion by the end of 2027, boosting confidence in the tech sector. Similarly, Delta Air Lines and American Airlines reported better-than-expected first-quarter revenues, with both stocks rising nearly five percent.

Major U.S. indices opened higher in New York, while most European markets also traded in positive territory. In Asia, markets closed mixed, with gains in Hong Kong, Seoul, and Taipei, while Tokyo and Shanghai ended lower.

Market analysts noted a cautious tone among investors ahead of key central bank decisions expected this week. David Morrison, Senior Market Analyst at Trade Nation, said markets have shown resilience but warned that uncertainty remains as investors assess geopolitical risks alongside evolving monetary policy expectations.

Currency markets were largely steady, with the U.S. dollar holding firm against major peers as traders await signals from the Federal Reserve. According to Bret Kenwell, an analyst at eToro, the Fed faces a difficult balancing act between slowing economic growth and persistent inflation, now compounded by rising oil prices.

Australia’s central bank added to the global policy outlook by raising its key interest rate, citing sharply higher fuel costs.

Benchmark crude prices surged, with Brent North Sea crude and West Texas Intermediate both gaining around two percent. Analysts warn that sustained prices above $100 per barrel could significantly heighten inflationary pressures worldwide.

Tensions escalated further after a drone strike targeted the Fujairah oil complex in the United Arab Emirates, a strategic facility that allows exports to bypass the Strait of Hormuz. Additional drone attacks were reported at a major oil field in southern Iraq, marking the second such incident in four days.

Meanwhile, Israel announced it had killed Iran’s national security chief during a wave of strikes in Tehran, alongside operations targeting Hezbollah positions in Beirut. The developments signal a widening conflict, with both sides increasingly targeting energy infrastructure.

Kathleen Brooks, research director at XTB, warned that concerns are shifting from potential shipping disruptions to a broader oil supply crisis across the Gulf region.

Former U.S. President Donald Trump has urged European and allied nations to support efforts to secure the Strait of Hormuz. However, the response has been muted. German Chancellor Friedrich Merz stated the conflict was not a NATO matter, while several countries, including Britain, Spain, Poland, Greece, Sweden, Australia, and Japan, have declined to participate.

As geopolitical tensions deepen, global markets remain on edge, with investors closely monitoring both energy supply developments and upcoming central bank decisions.