Oil rises toward $102 as Middle East supply risks persist

Oil approached $102 a barrel on Tuesday after four straight sessions of losses as traders weighed diplomatic developments against ongoing supply threats in the Middle East. Hopes for talks involving US and Iranian leaders and a planned meeting between President Donald Trump and Chinese President Xi Jinping eased some market pressure, while physical disruptions kept prices supported.

Brent crude recovered after falling almost 8% over the prior four sessions. Investors and market participants are monitoring the diplomatic calendar for signs that negotiations could reduce wartime disruptions to shipping and exports, although officials in Washington and Tehran maintain differing positions.

Physical risks remained elevated. UK maritime authorities reported a tanker was struck in the Strait of Hormuz on Monday. Satellite data showed Saudi Arabia increasing oil loadings from ports inside the Persian Gulf after a major cross‑country pipeline was shut, shifting more exports back toward Gulf waters.

Libya’s Sharara field has seen production drop by more than half after an armed group closed the pipeline supplying the Zawiya export terminal. Output at Sharara is estimated at about 127,000 barrels a day following the disruption.

Global crude prices have risen about 70% so far this year as Middle East hostilities disrupted shipments through the Strait of Hormuz and the Russia‑Ukraine war affected energy infrastructure. Refined fuel costs have climbed as well, with US retail diesel prices recently topping $6.50 a gallon. Those higher energy prices were a factor in the Federal Reserve’s decision to raise interest rates last week.

Governments and international bodies have taken measures in response to threats to shipping. The UK agreed to assist Saudi Arabia in responding to attacks claimed by Yemen’s Iran‑backed Houthi forces. The European Union’s foreign policy chief, Kaja Kallas, urged member states to provide additional naval and air assets to protect shipping and flagged the possibility of expanding the EU operation in the region. Separately, the US administration proposed a $5 billion reconstruction fund, to be managed by the US Development Finance Corporation, aimed at encouraging investment and rebuilding infrastructure damaged during the conflict.

Market participants say oil remains sensitive to new reports of talks, attacks on shipping and changes in output from key fields and export routes.