Oil extended gains on Tuesday as a U.S.-imposed deadline for Iran to open the Strait of Hormuz or be “taken out” approaches.
President Donald Trump threatened to order attacks on Iranian bridges and power plants and to rain “hell” on Tehran if it fails to comply with his deadline of 8 p.m. EDT Tuesday (0000 GMT Wednesday) to reopen the strait.
About a fifth of the global oil supply is normally shipped through the Strait.
Exports from several Gulf producers have already collapsed due to restricted flows through the Strait of Hormuz.
Brent crude futures rose $1.74, or 1.6%, to $111.51 a barrel by 0530 GMT, while U.S. West Texas Intermediate crude futures were up $3.45, or 3.1%, at $115.86.
Tehran rejected a ceasefire and said a permanent end to the war was necessary, and pushed back against pressure to reopen the strait.
Iranian forces effectively shut the strait after U.S. and Israeli attacks began on February 28.
The U.N. Security Council is expected to vote on Tuesday on a resolution to protect commercial shipping in the Strait of Hormuz, but in significantly watered-down form after veto-wielding China opposed authorising force, diplomats said.
Attacks in the region continued with explosions heard in the Syrian capital, Damascus, and surrounding countryside on Tuesday that were caused by the Israeli interception of Iranian missiles, Syrian state TV reported.
Saudi Arabia said on Tuesday it intercepted and destroyed seven ballistic missiles launched towards its Eastern Region, with debris falling near energy facilities.
Saudi Arabia’s state oil company Aramco raised the official selling price of its Arab Light crude to Asia for May delivery, setting a record premium of $19.50 a barrel above the Oman/Dubai average.
The conflict has squeezed global crude supply, sending spot premiums for U.S. WTI crude surging to record highs as Asian and European refiners scramble to secure replacement supplies amid disrupted Middle Eastern flows.