Brent crude futures climbed $1.02, or 1.2%, to $87.50 a barrel by 0924 GMT, while U.S. West Texas Intermediate (WTI) crude futures leaped $1.36, or 1.6%, to $85.18 a barrel. Trade on Monday was stopped as it was a U.S. public holiday.
Both benchmarks reached their highest levels after October 2014 on Tuesday.
This week, supply worries have increased behind Yemen’s Houthi group attacking the United Arab Emirates, escalating hostilities between the Iran-aligned group and a Saudi Arabian-led coalition.
After launching drone and missile strikes which set off explosions in fuel trucks and killed three people, the Houthi movement cautioned it could target more facilities. At the same time, the UAE stated it reserved the right to react to these terrorist attacks.
UAE oil firm ADNOC stated it had activated business continuity plans to provide an uninterrupted supply of products to its local and international customers behind an incident at its Mussafah fuel depot.
Also adding to geopolitical price premiums are growing tensions between OPEC+ member Russia and Ukraine.
In addition, some producers within the OPEC are working to pump at their allowed capacities, because of underinvestment and outages, under an agreement with Russia and partners to add 400,000 barrels per day each month.
According to PVM analyst Tamas Varga, the consensus is that the situation will not enhance in the foreseeable future, and oil demand growth and supply constraints inevitably guide to a tighter oil balance.
Goldman Sachs (NYSE: GS) analysts stated they expected oil inventories in OECD countries to drop to their lowest since 2000 by the summer, with Brent oil prices increasing to $100 later this year.
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