The United States has sharply escalated its confrontation with Iran, striking three Iranian crude oil tankers after the Islamic Revolutionary Guard Corps (IRGC) launched ballistic missiles towards two US Navy warships in regional waters, in the latest tit-for-tat exchange.
Oil prices were heading for their strongest weekly gain since mid-July on Friday as renewed fighting between the United States and Iran heightened concerns over disruptions to Middle East energy supplies.
The US military escorted 40 commercial vessels carrying about 18 million barrels of oil through the Strait of Hormuz on Tuesday, a wartime record, as Washington and Tehran traded their heaviest blows in weeks, CNN reported, citing two US officials familiar with the operation.
The United States carried out a fresh wave of strikes against Iranian military targets on Tuesday, while Iran retaliated with missile attacks targeting US-linked positions and activating air defences across several Gulf states.
The Saudi Ministry of Foreign Affairs has condemned Iran's targeting of the Saudi tanker Sidr while it was transiting the Strait of Hormuz, which resulted in fatalities among the crew.
Oil prices rose on Tuesday as renewed military tensions between the United States and Iran revived concerns that the conflict could continue to disrupt crude supplies from the Middle East.
Iran and Oman have signalled that they are close to reaching an agreement on arrangements for commercial navigation through the Strait of Hormuz, raising hopes of a breakthrough in the crisis that has disrupted one of the world's most important energy corridors.
Global air cargo rates fell in July as the conflict involving Iran pushed up jet fuel costs and disrupted supply chains, while new European Union import rules further weakened shipments from China and Hong Kong to Europe, according to WorldACD Market Data.
Gulf tensions remain high despite signs of diplomatic progress over the Strait of Hormuz, with Saudi Arabia warning of imminent coordinated attacks by Iran-backed militias even as Tehran and Muscat move closer to an agreement aimed at restoring commercial shipping through the strategic waterway.
Iran and Oman have moved closer to an agreement on reopening the Strait of Hormuz to commercial shipping, with both sides agreeing on the geographical coordinates of a proposed safe navigation corridor, even as conflicting messages over possible US-Iran negotiations continue to cloud prospects for a broader diplomatic breakthrough.
