Article: U.S.-Iran Tensions Spike Oil Prices
U.S.-Iran Tensions Spike Oil Prices
PHOTO CAPTION: FILE PHOTO: A drone view shows vessels near the Strait of Hormuz, as seen from Musandam, Oman, August 28, 2026. REUTERS/Stringer/File Photo
NEW YORK, Sept. 1 — Oil prices jumped more than $4 a barrel Tuesday and settled at five-week highs as renewed fighting between the United States and Iran fueled fears of further disruptions to Middle East energy supplies.
Brent crude futures climbed $4.16, or 4.6%, to settle at $94.65 a barrel. U.S. West Texas Intermediate crude rose $4.46, or 5.2%, to $90.22, giving Brent its highest close since July 24 and WTI its highest since July 23.
The rally accelerated after the United States launched new airstrikes against Iranian targets, diminishing hopes that the exchange of fire over the weekend would remain contained. Prices had already risen following the first direct U.S.-Iran attacks since July and reports that two tankers were struck while leaving the Strait of Hormuz, which Iran has effectively closed to shipping.
Tehran has remained defiant, warning it will prevent oil exports from leaving the Gulf. President Donald Trump has threatened to hit Iran “hard” in response to renewed Iranian strikes, while Treasury Secretary Scott Bessent has warned that Washington is preparing additional sanctions.
“Today at 12 p.m. ET (1600 GMT), U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran,” U.S. Central Command said on X.
“The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.”
Saxo Bank analyst Ole Hansen said the renewed hostilities had “raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz.”
Diesel prices also surge
Refinery disruptions around the world, particularly in the Middle East and Russia, have pushed diesel prices sharply higher.
U.S. diesel futures rose to a 52-month high Tuesday after climbing 51% during the previous 10 weeks. The diesel crack spread, a measure of refining profit margins, reached a record of about $107 a barrel, according to LSEG data.
Oil markets are also watching Russia, the world’s third-largest crude producer in 2025 behind the United States and Saudi Arabia, according to U.S. energy data.
Russian air attacks killed 12 people and injured many more in Kyiv and the surrounding region early Tuesday, Ukrainian authorities said, marking the sixth consecutive day of intense strikes on the Ukrainian capital. Russia is also a member of the OPEC+ group of oil-producing nations.
U.S. inventories in focus
Traders were awaiting weekly U.S. petroleum inventory data from the American Petroleum Institute on Tuesday and the U.S. Energy Information Administration on Wednesday.
Analysts estimated that energy companies withdrew 800,000 barrels of crude from storage during the week ending Aug. 28.
If confirmed, that would mark the first weekly decline in five weeks. U.S. inventories rose by 2.4 million barrels during the comparable week last year, while the five-year average for 2021 through 2025 was a decline of 5.1 million barrels.
(Source: Reuters)
