Oil prices surged to a four-week high on Tuesday as escalating attacks between the United States and Iran renewed fears over energy shipments through the Strait of Hormuz. Brent crude reached its highest since June 12, and US West Texas Intermediate hit a level not seen since June 16 — just days before the two nations signed a memorandum of understanding to end their conflict on June 18. Main Developments Brent crude futures climbed $2.89, or 3.47%, to $86.19 per barrel by 4:58pm PKT, while WTI crude rose $1.53, or 1.96%, to $79.67 a barrel. The US military conducted a third consecutive night of strikes against Iran between Monday and Tuesday, as President Donald Trump reinstated a naval blockade of Iranian shipping and proposed a 20% fee to guard the Strait of Hormuz. Two United Arab Emirates tankers were hit by Iranian cruise missiles in the southern lane of the Strait of Hormuz, in Omani territorial waters, the UAE Ministry of Defence reported on Monday. One Indian crew member was killed and eight others wounded in the strikes. Read also: Pakistan auto sales surge 25-67% in FY26 on low rates, new models Shipping data on Monday showed the number of tankers transiting the Strait of Hormuz fell to the lowest level in two months. "The latest escalation, including the US reinstatement of the blockade and Iranian responses, has clearly injected fresh risk into the market," said Tim Waterer, chief market analyst at KCM Trade. Background The June 18 memorandum of understanding between the US and Iran was meant to de-escalate tensions, but the agreement unraveled within weeks. "Despite signing the memorandum of understanding and having a deal, this did not last for even a few weeks. So that's the concern the market is trying to price right now," noted ANZ analyst Soni Kumari. Meanwhile, Iran's oil exports continue as usual despite the cancellation of a 60-day waiver of US oil sanctions last week, according to Oil Minister Mohsen Paknejad on his official Telegram account. In a separate front, Yemen's Houthi movement fired missiles at Saudi Arabia after the Yemeni government attacked an international airport in Sanaa on Monday, attempting to prevent an Iranian plane from landing. Why It Matters The Strait of Hormuz is a critical chokepoint for global oil shipments — roughly a fifth of the world's petroleum passes through it. Any sustained disruption could push prices higher and strain economies already grappling with inflation. "What we think is that the peak of the escalation is behind us, but there are upside risks to oil prices if these disruptions continue and that will keep prices in the $85-$90 range," Kumari added. If Houthi attacks extend to Saudi crude products in the Red Sea, it could further destabilize regional oil flows, warned Simon Wong, a portfolio manager at Gabelli Funds. "The competing objectives of both sides have made the supply picture highly uncertain," Waterer said. What's Next Citi analysts noted that Iran might walk away from the memorandum of understanding until after the US mid-term elections, a scenario that would likely keep oil prices higher for longer. Market participants now watch for any signs of further military escalation or diplomatic breakthroughs that could ease or worsen supply risks.