Global oil prices declined again on Tuesday, reversing part of the previous session’s sharp rally as investors balanced ongoing geopolitical risks in the Strait of Hormuz against early signs of limited relief in global shipping flows.
As of 10:30 WAT, Brent crude fell by 1.43 percent to $112.8 per barrel, while West Texas Intermediate (WTI) dropped by 2.26 percent to $104.0 per barrel, extending losses after a volatile start to the week.
The pullback follows a strong surge on Monday, when Brent gained over 4 percent and WTI rose by nearly 6 percent amid intensified military exchanges between the United States and Iran. The escalation included reported attacks on vessels and energy infrastructure in the Gulf, raising concerns about potential disruptions to oil supply from one of the world’s most critical transit routes.
Market sentiment remained cautious as renewed hostilities between both countries undermined expectations of de-escalation. The confrontation has centred on control of the Strait of Hormuz, a key corridor for global oil shipments, with both sides engaging in actions that have heightened supply risk.
Despite the tension, prices eased as traders reacted to the United States’ efforts to restore some level of maritime movement. Washington has launched a naval operation, “Project Freedom,” announced by Donald Trump, aimed at escorting stranded commercial vessels through the Gulf.
The U.S. military confirmed that operations under the initiative are underway, with naval assets deployed to guide ships along safer routes. Early reports indicate that a limited number of vessels have successfully exited the region under escort, suggesting some easing of immediate bottlenecks.
However, analysts note that the improvement remains partial and unlikely to resolve broader supply concerns in the near term. Shipping activity into the Gulf is still restricted, and the risk of further disruption persists as tensions continue.
Iran has also intensified its response, with reported strikes targeting vessels and infrastructure in the Gulf, including facilities in the United Arab Emirates. These developments have reinforced market concerns about the duration and scale of potential supply interruptions.
Market analysts say the latest decline reflects a short-term correction rather than a fundamental shift, with prices still trading within a highly volatile range. They add that while the U.S. intervention has provided temporary relief, it does not eliminate the underlying risks tied to the conflict.
With geopolitical uncertainty still elevated and supply routes vulnerable, oil prices are expected to remain sensitive to further developments, with any escalation likely to trigger renewed upward pressure.