Oil prices were rising in early trade as the Israel-Iran conflict entered its fifth day and President Trump called for an evacuation of Tehran.
Brent crude gained 1.2% to $74.10 a barrel, while WTI advanced 1.2% to $72.65 a barrel. The benchmarks settled lower in the previous session after Iran signaled it was seeking to de-escalate hostilities and resume nuclear talks. However, while there is no sign of actual production losses as of yet, the market fears further escalation and the potential disruption of flows through the Strait of Hormuz.
Meanwhile, the U.S. central bank kicks off its two-day policy meeting later on Tuesday. “Recent inflation data has been reassuring, but tariffs and the risk of an oil price spike due to Middle East tensions will likely keep the Fed in a cautious stance,” Swissquote said.