Oil prices moved higher on Tuesday after reports of attacks on vessels near the Strait of Hormuz renewed concerns about potential disruptions to shipping through one of the world’s most important energy transit routes.

Brent crude futures climbed 89 cents, or 1.24%, to $72.88 a barrel, while US West Texas Intermediate crude gained 71 cents, or 1.04%, to $69.26 a barrel by 09:39 GMT.

“The main driver for the market this morning is the reported attack on a vessel in the Strait of Hormuz,” said Ole Hansen, head of commodity strategy at Saxo Bank.

He added that the incident had restored part of the geopolitical risk premium to oil prices. While the premium remains modest compared to previous periods of heightened tensions, it is currently the key factor supporting the market.

Hansen noted that any further escalation could push prices toward $75 a barrel, with $80 becoming the next major target if tensions continue to intensify.

Maritime security sources said on Tuesday that a Saudi-flagged oil tanker sustained damage near the Strait of Hormuz off the coast of Oman, following an earlier attack on a Qatari liquefied natural gas carrier in the same area.

Four sources familiar with the matter said the Qatari vessel suffered significant damage while transiting the Omani side of the strait, following reports that Iran’s Revolutionary Guard launched missiles at ships passing through the waterway overnight.

On the diplomatic front, Iran’s foreign minister said on Tuesday that talks aimed at reaching a final agreement with Washington would not resume if US threats continued, after President Donald Trump warned that he would “finish the job” if no agreement is reached.

Investors continue to closely monitor negotiations between the United States and Iran and their potential impact on shipping through the Strait of Hormuz, which before the Iran conflict handled roughly 20% of global daily oil and LNG supplies.

Meanwhile, shipping data showed that Japan is set to receive additional crude oil cargoes from the Middle East this month after two Japanese-owned supertankers carrying Saudi crude successfully departed the Strait of Hormuz on Tuesday after being stranded there.

Looking further ahead, Société Générale expects the oil market to shift from deficit to surplus in late 2026 and throughout 2027 as supply growth outpaces demand growth.

The bank lowered its forecast for oil prices in the fourth quarter of 2026 to $75 a barrel from a previous estimate of $83, while reducing its 2027 average forecast to $73 a barrel from $79. It said global inventories are expected to gradually recover despite continued market volatility.

Separately, five sources familiar with the matter revealed that Saudi Arabia is studying an expansion of the capacity of its crude oil pipeline network leading to the Red Sea coast, a move that would allow the kingdom and potentially neighboring producers to export larger volumes of oil without relying on the Strait of Hormuz.

The British pound climbed to its highest level in three weeks against the US dollar on Tuesday, extending gains as the greenback remained under pressure following weaker-than-expected US jobs data released last week. Sterling also reached its strongest level against the euro in a year.

The pound rose to $1.3401, its highest level since June 17, before easing slightly to trade around $1.338.

The US dollar had previously reached a 13-month high against a basket of major currencies in late June, as investors increased bets that the Federal Reserve would raise interest rates later this year.

However, a framework agreement between the United States and Iran triggered a sharp decline in oil prices, while US nonfarm payrolls data released on Thursday showed the economy added fewer jobs than expected in June. The combination prompted markets to scale back expectations for further rate hikes and weighed on the dollar.

At the same time, sterling continued to trade near a 13-month high against the euro, with the single currency slipping to 85.41 pence.

The move followed data released last week showing eurozone inflation came in below expectations in June, leading investors to reduce bets on additional interest rate increases from the European Central Bank.

Analysts said sterling also benefited from the decline in oil prices, which had surged earlier in the year because of the Iran conflict. Higher energy costs had been seen as a threat to the UK economy, given the country's status as a major energy importer and its relatively limited gas storage capacity.

Support for the pound was further strengthened after Andy Burnham, the frontrunner to become the next prime minister, pledged to adhere to the government's fiscal rules, easing concerns that a future administration could significantly increase public spending.

April LaRusse, head of investment specialists at Insight Investments, said the pound’s resilience despite recent political turbulence reflects a simple reality: most of the negative news had already been priced into markets.

She added: “Investors have spent years positioning for weak UK economic performance. As a result, with outcomes proving less negative than expected and underlying fundamentals gradually stabilizing, the British currency has started to find increasing support.”

Gold prices fell in European trading on Tuesday, extending losses for a second consecutive session and moving further away from a two-week high, as corrective trading and profit-taking continued, while additional pressure came from a stronger US dollar against a basket of currencies.

After expectations for US interest rate hikes this year declined, markets are now awaiting the release on Wednesday of the minutes from the Federal Reserve’s first policy meeting under Kevin Warsh. The minutes are expected to provide further clues about the future path of US monetary policy.

The Price

• Gold prices today: Gold fell 1.2% to $4,116.75 per ounce from an opening level of $4,165.53, after touching an intraday high of $4,168.59.

• At Monday’s settlement, gold lost 0.2%, marking its first decline in four sessions after earlier hitting a two-week high of $4,203.06 per ounce.

US Dollar

The US Dollar Index rose more than 0.1% on Tuesday, resuming gains after a brief pause in the previous session and reflecting renewed strength in the US currency against a basket of major and minor currencies.

The advance came as investors returned to buying the dollar as the preferred alternative investment amid renewed military tensions in the Strait of Hormuz, especially after Iran’s Revolutionary Guard launched missile attacks on several commercial vessels.

US Interest Rates

• Federal Reserve Governor Christopher Waller said on Monday that interest rate adjustments could be a “valuable tool” that accelerates the impact of monetary policy under the right conditions.

• According to CME FedWatch, markets currently price a 75% probability that the Federal Reserve will leave interest rates unchanged at its July meeting, while the probability of a 25-basis-point rate hike stands at 25%.

• For December, markets price a 23% probability that rates will remain unchanged, while the probability of a 25-basis-point hike stands at 77%.

• The minutes from the Federal Reserve’s first policy meeting under its new Chair Kevin Warsh will be released on Wednesday, with investors expecting clearer signals on the direction of US interest rates this year.

Gold Outlook

Nicholas Frappell, global head of markets at ABC Refinery, said gold’s price action appears to be a partial continuation of last week’s movement, with relative stability and the formation of a support level.

He added that markets are now awaiting comments from the Federal Reserve meeting minutes to better understand the central bank’s approach to short-term interest rate policy.

SPDR Gold Trust

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, increased by 1.42 metric tons on Monday, bringing total holdings to 1,002.79 metric tons, rebounding from 1,001.37 metric tons, the lowest level since September 24, 2025.

The euro edged higher in European trading on Tuesday against a basket of global currencies, extending its gains for a fourth consecutive session versus the US dollar and moving closer to a two-week high. The single currency continues to benefit from a string of weaker-than-expected US economic data, which has reduced expectations for additional Federal Reserve rate hikes this year.

At the same time, expectations for higher European interest rates have eased significantly following less hawkish comments from European Central Bank President Christine Lagarde and softer-than-expected eurozone inflation data for June.

The Price

• EUR/USD today: The euro rose by less than 0.1% to $1.1448 from an opening level of $1.1441, after touching an intraday low of $1.1436.

• The euro closed Monday up by less than 0.1% against the dollar, marking its third straight daily gain and remaining close to a two-week high of $1.1473.

The US dollar

The US Dollar Index fell around 0.1% on Tuesday, extending losses for a second consecutive session and moving closer to its lowest levels in two weeks, reflecting broader weakness in the greenback against major and minor currencies.

The decline comes as a series of US economic reports continue to disappoint expectations. The latest data from the Institute for Supply Management showed a sharper-than-expected slowdown in US services sector activity during June.

Those figures have reduced the likelihood of the Federal Reserve delivering another rate hike this year. Investors will now focus on Wednesday’s release of the minutes from the first Fed policy meeting chaired by Kevin Warsh for further clues on the outlook for US monetary policy.

European interest rates

• ECB President Christine Lagarde said last week during the Sintra conference in Portugal that risks to inflation and economic growth in the eurozone have become more balanced compared with a few weeks ago, helped by the recent decline in oil prices.

• Official eurozone inflation data showed a larger-than-expected slowdown in consumer price growth during June, largely due to lower fuel prices following the end of the Iran conflict.

• Following those comments and inflation figures, money markets cut expectations for a 25-basis-point ECB rate hike in July from 30% to just 5%.

• Investors are now awaiting further eurozone data on inflation, unemployment and wage growth to reassess the outlook for ECB policy.