08:50 AM EDT, 03/17/2026 (MT Newswires) -- Oil prices rose early on Tuesday, rebounding from a steep day-prior drop as worries over tightening supplies as the U.S. and Israel's war on Iran continues to block the Strait of Hormuz.

West Texas Intermediate (WTI) crude oil for April delivery was last seen up US$3.33 to US$96.83 per barrel, while May Brent oil was up US$3.23 to US$103.44.

Prices fell more than 5% as Iran let some tankers through the Strait, the chokepoint for exports from Persian Gulf nations that supply 20% of the world's oil demand. Reports said Iran allowed a few tankers from allied nations to transit the Strait, prompting a 5% drop in WTI prices even it continued strikes on oil infrastructure on neighboring countries.

"Iran seems to want to let ships through from "friendly" countries where, among other things, discussions are being held with India. But concerns about the supply of oil have this morning again lifted the oil price," Marcus Widen, an economist at SEB Research noted.

Despite the trickle of ships Iran is permitting to leave the Gulf, supply remains severely constrained as Iran blocks the bulk of exports from the region. A call from U.S. President Trump for naval support from other countries to escort tankers through the Strait has been broadly rebuffed, continuing the lockdown on shipments from the region, squeezing supply and keeping prices elevated.

"Brent and WTI remain heavily influenced by speculative, headline-driven trading-some of which contributed to the earlier sell-off-the underlying physical market remains severely strained. Most refined products are still trading near the elevated levels seen during the initial phase of the attacks. Meanwhile, Iranian strikes on neighbouring energy infrastructure point to a potentially dangerous escalation, with the U.S. threatening retaliatory action against Iran's export facilities on Kharg Island," Saxo Bank noted.