Oil prices settle up more than US$4 a barrel on renewed US-Iran fighting
Oil settles at a five-week high as US-Iran fighting fuels fears of fresh Middle East supply disruptions through the Strait of Hormuz.
A file photo of an oil tanker docked at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, Fujairah, United Arab Emirates, on May 6, 2026. (File photo: Reuters/Amr Alfiky)
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NEW YORK: Oil prices jumped more than US$4 a barrel on Tuesday (Sep 1), settling at a five-week high, as traders feared more supply disruptions from the Middle East due to renewed fighting between the US and Iran.
Brent futures rose US$4.16, or 4.6 per cent, to settle at US$94.65 a barrel. US West Texas Intermediate (WTI) crude rose US$4.46, or 5.2 per cent, to settle at US$90.22.
That was the highest close for Brent since Jul 24 and for WTI since Jul 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 12pm ET (4pm 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.
DIESEL PRICE SPIKE
Disruptions at refineries around the world, especially in the Middle East and in Russia, have caused diesel prices to spike.
In the US, diesel futures jumped to a 52-month high on Tuesday after soaring 51 per cent over the past 10 weeks, boosting the diesel crack spread, which measures refining profit margins, to a record high of around US$107 a barrel, according to LSEG data.
Russian air attacks killed 12 people and injured many more in Kyiv and the surrounding region early on Tuesday, authorities said, marking the sixth straight day of intense strikes on the Ukrainian capital.
Russia was the world’s third-biggest crude oil producer behind the US and Saudi Arabia in 2025, according to US energy data, and is a member of the OPEC+ group of producing countries.
US OIL INVENTORIES
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 Aug 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).
Source: Reuters/fs
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