08/04/2026 05:58 AST
Oil prices rose on Tuesday ahead of a deadline set ?by US President Donald Trump for Iran to open the Strait of Hormuz or face attacks on power plants and other infrastructure.
Brent crude futures were up 87 cents, or 0.79 percent at $110.60 a barrel by 6:06 p.m. Saudi time while US West Texas Intermediate crude was close to a four-year high at $116 a barrel, up $3.49 or 3.1 percent.
Typically WTI trades at a discount to Brent, but this has reversed in a market where barrels for earlier delivery command a higher price. The benchmark WTI contract is for May delivery while Brent is for ?June.
"What appears to ?be a shift in relative value is, in reality, a ?reflection ?of ?how ?aggressively the ?market is pricing immediacy," Saxo bank analyst Ole Hansen said in a note.
Trump has given Iran until 8 p.m. in Washington - 3 a.m. Saudi time - to reopen the Strait of Hormuz, through which about a fifth of global oil supply is normally shipped. Iranian forces effectively shut the strait after US and Israeli attacks began on Feb. 28.
If Tehran fails to comply, Trump said "every bridge in Iran will be decimated" by 7 a.m. Saudi time on Wednesday and "every power plant in Iran ?will be out of business, burning, exploding, and never to be ?used again."
Strikes on Iran intensified on Tuesday, including ?attacks on railway and road bridges, an airport and a ?petrochemical plant, and power lines, according to Iranian ?media.
Responding to a US proposal through mediator Pakistan, Iran rejected a ceasefire and said ?a permanent end to the war was necessary, pushing back against pressure to reopen the strait.
The UN Security Council is expected to vote on Tuesday on a resolution to protect commercial shipping in ?the strait, but in significantly ?watered down form after veto-wielding China opposed authorizing force, diplomats said.
Alongside the unusual US crude oil futures premium over Brent, the conflict has sent spot premiums for WTI crude surging to record highs as Asian and European refiners scramble to replace Middle Eastern supply.
Kazakhstan's energy ministry said on Tuesday its oil exports via the Black Sea were stable a day after Russia said Ukrainian drones had hit the Caspian Pipeline Consortium's terminal, which handles 1.5 percent of global oil supply.
OPEC+ oil producing nations agreed on Sunday to raise their May oil output ?quotas by 206,000 barrels per day, ?though the increase will be largely notional as key members cannot boost production because of the Hormuz closure.
Reuters
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