Islamabad: Benchmark Brent crude futures shot up above USD 95 a barrel as hostilities between Iran and the US erupted once more in the Persian Gulf around the contested Strait of Hormuz. The two countries traded missile strikes across various parts of the region, with both claiming are denial and operational successes, though none of the claims could be verified.
Brent crude futures are the most widely traded in the world and are seen as indicators of upcoming shocks. Brent futures rose USD 4.16, or 4.6 percent, to settle at USD 94.65 a barrel. US West Texas Intermediate (WTI) crude rose USD 4.46, or 5.2 percent, to settle at USD 90.22.
That was the highest close for Brent since July 24 and for WTI since July 23.
The US launched new air strikes on Iranian targets, quashing hopes that an exchange of fire last weekend might not presage a wider renewal of hostilities.
Oil prices had already risen after that first exchange of direct attacks since July and after reports of two tankers being hit leaving the Strait of Hormuz, the global oil supply waterway that Iran has effectively closed to shipping.
Tehran remained defiant, warning that it would prevent oil from being exported from the Gulf, despite a threat by US President Donald Trump to hit Iran "hard" in response to the renewed Iranian strikes, and a warning from US Treasury Secretary Scott Bessent that Washington was about to impose new sanctions.
"Today at 12 pm ET (1600 GMT), US forces began striking Islamic Revolutionary Guard Corps targets in Iran," US Central Command posted 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."
The fresh hostilities "raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz," Saxo Bank analyst Ole Hansen said. The oil market was watching for weekly storage reports from the American Petroleum Institute trade group on Tuesday and the US Energy Information Administration on Wednesday.
Analysts estimated energy firms pulled 0.8 million barrels of crude from storage during the week ended August 28.
If correct, that would be the first decline in five weeks and compares with an increase of 2.4 million barrels in the same week last year and an average decrease of 5.1 million barrels over the past five years (2021 to 2025).
