Oil prices continue to surge amid growing Israel-Iran tensions

The prices jumped initially but later eased as the market stayed cautious about any major disruption in oil supplies.

Brent crude oil went up by as much as 2.2 per cent before falling slightly to trade just above $73 a barrel.

West Texas Intermediate (WTI) also rose and hovered near $72. This comes after oil prices had dropped on Monday when there were signs that Iran was trying to calm tensions.

However, Israel has continued its military strikes, which began last Friday, targeting key nuclear sites in Iran.

The oil market is closely watching the Strait of Hormuz -- a narrow waterway that plays a crucial role in global oil trade.

Around 20 per cent of the world's daily oil supply passes through this route. Maritime security company Ambrey reported a possible incident near the area on Tuesday, although details were not clear.

So far, the impact of the conflict has mostly been seen in the shipping sector. According to the UK Navy, ships passing through the Strait of Hormuz and the Persian Gulf are facing issues with navigation signals.

Many shipping companies are now hesitant to take bookings in the region due to safety concerns. However, Iran's infrastructure for exporting oil has not been damaged yet.

Even with some gains being reversed, oil prices remain higher than they were before the current conflict began.

This has led to record levels of hedging by oil producers and a rise in trading of oil futures and options.

Investment bank Morgan Stanley has also raised its oil price forecasts -- citing higher risks because of the conflict.

Meanwhile, the White House is reportedly discussing the possibility of meeting Iranian officials this week to talk about reviving the nuclear deal and ending the ongoing war with Israel, according to a report by Axios.

Israel, on the other hand, claimed that it has taken control over large parts of Iran's airspace and has heavily damaged its missile and nuclear facilities since launching its assault on Friday.

This has sparked fears of a broader war in the region, which produces nearly one-third of the world's oil.