Investing.com - Oil prices were higher on Tuesday as rising geopolitical tensions in the Middle East clouded the demand outlook, offsetting concerns over an escalating trade war between the U.S. and China.
U.S. Crude Oil WTI Futures for June rose 0.31% to 61.23 at 11:44 PM ET (3:44 GMT). International Brent Oil Futures for July delivery climbed 0.38% to 70.50.
Oil prices gained following reports that Saudi Arabia said two of its oil tankers were sabotaged off the coast of the United Arab Emirates in an attempt to undermine the security of crude supplies.
A source told CNN Business that the attacks were targeted outside the Strait of Hormuz, dubbed as the “world’s most important oil transit chokepoint” by the U.S. Energy Information Administration.
It has not been confirmed who was responsible for the reported attacks.
Meanwhile, news on the Sino-U.S. trade front made headlines again today.
In response to the Trump administration's decision to hike tariffs on $200 billion worth of Chinese goods to 25%, Beijing announced Monday a tariff increase on $60 billion of U.S. imports.
The intensified trade war between the world’s two biggest economies sent prices of most risk assets lower. All major markets in Asia reported losses Tuesday morning, with the market in Hong Kong down more than 1.5%.
“A full-blown trade war would have lasting consequences on global growth, seriously limiting the upside for energy demand. Disruptions have balanced the market, but lower demand and rising U.S. production could make for a quick reversal,” said Alfonso Esparza, senior market analyst at OANDA, in a note cited by Reuters.