Oil prices jump over US$4 on renewed US-Iran fighting
Brent closes at US$94.65 and WTI at US$90.22 as fresh US strikes on Iran revive fears of prolonged disruption through the Strait of Hormuz
Oil prices jumped more than US$4 a barrel to five-week closing highs on Tuesday (September 1), after renewed fighting between the United States and Iran intensified concerns over Middle East supply disruptions.
Brent crude futures rose US$4.16, or 4.6%, to settle at US$94.65 a barrel, their highest close since July 24.
US West Texas Intermediate (WTI) gained US$4.46, or 5.2%, to US$90.22, its strongest settlement since July 23.
The rally followed a new round of US air strikes on Iranian targets, ending hopes that the exchange of fire during the previous weekend would not develop into a broader resumption of hostilities.
Oil had already risen following the first direct attacks between the two countries since July and reports that two tankers had been hit while leaving the Strait of Hormuz.
Hormuz disruption drives supply fears
Iran, which has effectively closed the strategic waterway to shipping, warned that it would prevent oil exports from leaving the Gulf.
US President Donald Trump threatened a forceful response to renewed Iranian attacks, while Treasury Secretary Scott Bessent said Washington was preparing additional sanctions.
US Central Command said American forces began striking Islamic Revolutionary Guard Corps targets in Iran at noon US Eastern time, or 4pm GMT, following attempted attacks on commercial shipping and US service personnel in the region.
Saxo Bank analyst Ole Hansen said the escalation had “raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz”.
Refinery disruption sends diesel higher
Interruptions at refineries, particularly in the Middle East and Russia, have tightened diesel supplies.
US diesel futures reached a 52-month high after climbing 51% over the preceding 10 weeks.
The diesel crack spread, which reflects the refining margin between crude oil and diesel, reached a record of about US$107 a barrel, according to London Stock Exchange Group data.
Russian air strikes killed 12 people and injured others in Kyiv and surrounding areas early on Tuesday, marking a sixth consecutive day of intense attacks on the Ukrainian capital.
Russia was the world’s third-largest crude producer in 2025, behind the United States and Saudi Arabia, and is a member of the OPEC+ producer alliance.
US crude inventories may end five-week rise
Traders were also awaiting weekly US storage reports from the American Petroleum Institute and the US Energy Information Administration.
Analysts estimated that energy companies withdrew 800,000 barrels of crude from storage during the week ending August 28.
If confirmed, that would be the first weekly decline in five weeks. Inventories rose by 2.4 million barrels during the corresponding week of 2025, while the five-year average for the period was a reduction of 5.1 million barrels.
