Oil prices rise over 1% amid Middle East tensions affecting fuel costs locally

Oil prices rose by more than 1% on Tuesday, recovering some of the previous session’s losses as Iranian attacks on the United Arab Emirates rekindled supply fears while the Strait of Hormuz remains largely shut.

Brent crude futures gained $1.73, or 1.7%, to $101.94 a barrel by 1315 GMT while U.S. West Texas Intermediate (WTI) crude advanced by $1.23, or 1.3%, to $94.73. As of March 17, that price was hovering around $94.04 per barrel.

In the U.S., the resulting gas prices have increased to a national average of about $3.79 per gallon, stated AAA, an insurance, travel and automotive services-related organization. That price is 33 cents more than last week, 86 cents more than a month ago and 72 cents more than this time last year.

Idaho’s average price for a gallon of gas was the same as the national average at $3.79 per gallon. The state is currently the 11th most expensive in the country for gas. California ranked highest at an average of $5.53 per gallon, and Kansas was cheapest with an average of $3.15 per gallon.

The least expensive pump price in Idaho was reported to be in Ammon, still below the $3 mark at $2.94. From there, prices across the state jump up to $3.27 in Blackfoot and more than $3.30 in other parts of Idaho. AAA Idaho reported that prices shot up 10 cents overnight on average throughout the state, with some areas increasing by 17 cents per gallon.

In the previous session, Brent lost 2.8% while U.S. WTI fell by 5.3% after some vessels sailed through the critical Strait of Hormuz waterway.

The U.S.-Israeli war on Iran is in its third week with no end in sight, as Iran renews attacks on the United Arab Emirates. Oil loading at the United Arab Emirates port of Fujairah was at least partly halted on Tuesday after a third attack in four days caused a fire at the export terminal while operations at the Shah gas field remained suspended after an earlier attack.

“The crude oil market is still reeling from the global implications of the conflict in the Middle East,” said Matthew Conde, director of public affairs with AAA Idaho. “As long as there is supply uncertainty, crude prices ― and pump prices ― will be under extreme pressure. Spring Break prices haven’t been this high since 2022.”

Fujairah, located on the Gulf of Oman just outside the Strait of Hormuz, is a critical exit point for oil volumes equivalent to roughly 1% of global demand.

Meanwhile, the disruption to shipping through the Strait of Hormuz ― a vital gateway for about 20% of the world’s oil and liquefied natural gas trade ― has raised concerns about supply shortages, higher energy costs and rising inflation.

“The risks remain stark: It only takes one Iranian militia to fire a missile or plant a mine on a passing tanker to reignite the entire situation,” IG market analyst Tony Sycamore said in a note.

Several U.S. allies rebuffed Donald Trump’s call on Monday to send warships to escort shipping through the strait, drawing criticism from the U.S. president, who accused Western partners of ingratitude after decades of support.

Oil tankers are “starting to dribble through” the Strait of Hormuz, White House economic adviser Kevin Hassett told CNBC in on Tuesday, reiterating the Trump administration’s position that they see the Iran conflict lasting weeks, not months.

“While that has eased concerns about an immediate hit from locked-up Middle Eastern barrels, traders still expect the disruption to be severe,” investment bank Cavendish said in a note.

Middle East crude benchmarks have soared to record highs, becoming the world’s most expensive oil, with traders blaming the price spike on reduced supply available for delivery.

The effective closure of the strait has forced the United Arab Emirates, the Organization of the Petroleum Exporting Countries’ third-largest producer, to reduce its output by more than half, two sources told Reuters.

Oil prices still have the potential to be higher by the end of March, with technical analysis showing WTI’s medium-term resistance at $124 a barrel, said OANDA analyst Kelvin Wong.

To curb rising energy costs, the head of the International Energy Agency suggested member countries could release more oil, in addition to the 400 million barrels they have already agreed to draw from strategic reserves.

Reporting by Stephanie Kelly in London and Anushree Mukherjee in Bengaluru; Editing by David Goodman; IBR staff contributed to this report.