US Crude Prices Fall Over 1% as Traders Assess Supply Risks

US Crude Prices Eased by Over 1% Amid Middle East Tensions

US crude prices fell by more than 1% on Tuesday as the market weighed the impact of Iranian attacks on ships in the Strait of Hormuz. The market's concerns were somewhat alleviated by news that a US-flagged ship operated by Maersk had successfully transited the strait accompanied by US military assets.

As of 2236 GMT, US West Texas Intermediate (WTI) crude was trading at $104.88 a barrel, down $1.54 from the previous day's price. This represents a decline of 1.5%.

The Alliance Fairfax, a US-flagged vehicle carrier operated by Maersk's Farrell Lines unit, was the first commercial vessel to exit the Gulf via the Strait of Hormuz with US military escort. Maersk's successful transit is seen as a significant development in efforts to restore commercial shipping through the critical energy transit route.

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US Central Command (Centcom) is actively assisting efforts to restore commercial shipping through the Strait of Hormuz, according to a statement released on Monday. The statement highlights the US military's commitment to ensuring the safe passage of commercial vessels through the region.

Oil prices had surged by over 6% on Monday following the launch of a new US operation aimed at reopening the Strait of Hormuz to shipping. However, Iran retaliated against the US attempt, prompting a significant escalation of the conflict. Several commercial vessels were reportedly struck, and a UAE oil port was set ablaze after an Iranian strike. The conflict's latest escalation occurred just four weeks after a ceasefire was declared.