Oil prices were mixed on Tuesday as geopolitical tensions in the Middle East returned to the market's attention following the US military operation in southern Iran.
Brent crude for July delivery rose 1.6% to $97.72 a barrel in Asian trading, while US West Texas Intermediate (WTI) crude for June fell 5.4% to $91.38 a barrel.
The US military said it had launched a military operation in southern Iran targeting ships that were allegedly trying to use mines and missile launch sites.
United States Central Command said the operation was carried out to protect US troops from threats linked to Iran.
At the same time, mixed statements from US President Donald Trump also added to market uncertainty.
Trump said talks with Iran were going well, but warned that military action could resume if talks fail to reach an agreement.
Trump also urged several countries including Saudi Arabia, Qatar, Pakistan, Turkey, Egypt and Jordan to join the Abraham Accords to expand diplomatic relations with Israel.
Tensions in the Middle East region continue to put pressure on the global oil market, particularly involving the strategic trade route in the Strait of Hormuz, which is a major route for world oil shipments.
Swiss investment bank UBS said the global oil market is now showing signs of a growing supply shortage as oil inventories continue to shrink amid disruptions to shipments through the Strait of Hormuz.
According to UBS, monitored global oil inventories fell by 246 million barrels during March and April. In fact, cumulative production losses are expected to exceed 1 billion barrels by the end of May.
The sharp decline in crude and refined product inventories shows the market is still facing a tight supply situation despite an increase in oil stored in tankers following the shift of US oil exports to Asia.
