Oil prices continue to rise as tensions in the Middle East continue

Oil prices surged on Tuesday after President Donald Trump announced plans to impose a 20% shipping fee on cargo passing through the Strait of Hormuz and reinstate a blockade of Iranian ports, fueling concerns about renewed disruptions to global oil supplies. As a result, WTI crude climbed 2% to $79.80 per barrel, while Brent crude rose 1.8% to $84.86, extending the previous sessions strong gains.

The announcements have increased fears of further military escalation in the Middle East. Citi warned that the measures raise the risk of prolonged tensions and could keep oil prices elevated for longer.

U.S. stock futures edged lower on Tuesday as investors remained cautious amid escalating U.S.-Iran tensions and awaited key corporate earnings and June inflation data. Dow futures fell 0.4%, while both the S&P 500 and Nasdaq-100 futures declined 0.3% and 0.4%, respectively. The previous session saw sharp losses after President Trump announced the reinstatement of a blockade on Iranian shipping through the Strait of Hormuz, driving oil prices sharply higher and increasing inflation concerns.

Investors are now focused on the June Consumer Price Index (CPI) report and Federal Reserve Chair Kevin Warshs congressional testimony.

Gold rebounded above $4,000 on Tuesday after falling nearly 3% to a two-week low in the previous session. A slight pullback in the U.S. dollar and dip-buying helped support prices.

However, gains remain limited as escalating tensions between the U.S. and Iran, including new military strikes and attacks on oil tankers in the Strait of Hormuz, continue to drive oil prices higher and fuel inflation concerns.