09:11 AM EDT, 03/18/2025 (MT Newswires) -- Oil prices rose early on Tuesday as tension ratcheted higher in the Middle East after Israel broke its Gaza ceasefire with the Hamas militant group by launching strikes that left hundreds dead.

West Texas Intermediate crude oil was last seen up US$0.96 to US$68.54 per barrel, the highest since Feb.28, while May Brent crude rose US$0.94 to US$72.01.

Israel launched overnight airstrikes on Gaza, killing more than 400 Palestinians according to The Guardian, and ending the two-month ceasefire with Hamas. The renewed hostilities come a day after Israeli Prime Minister Benjamin Netanyahu said he will fire the head of Shin Bet, the country's security service, amid its investigation over alleged payments from Qatar to senior members of Netanyahu's staff.

U.S. President Donald Trump, who on the weekend launched alarge-scale attacks on Yemen's Houthi militants, on Monday said he will hold Iran responsible for any further attacks on Red Sea shipping by the group. Trump said Iran will face "dire" consequences for any further attacks on shipping by the militant group, raising the prospect of war in the Persian Gulf, a region that produces nearly a third of the world's oil demand.

"While oil has not been a major casualty of the two and a half years of ongoing unrest in the region, any escalation that involves a direct confrontation with Iran still poses a clear risk to regional supplies," Helima Croft, Head of Global Commodity Strategy and MENA Research at RBC Capital Markets, said in a note.

Tuesday's rise in the price of crude also comes on hopes for a revival for the economy of China, the No.1 importer, after the country on Monday said it will take steps to boost flagging consumer spending by offering support for rising wages and offering subsidies for childcare, amid other measures.