Oil prices climbed to their highest levels in six weeks on Monday as escalating tensions in the Middle East raised fresh concerns about regional energy supplies.
The move came after Iran warned that it could target energy infrastructure across the region in response to further US attacks on Iranian assets.
Brent Crude Rises Above $97
Brent crude futures gained $1.03, or 1.1%, to settle at $97.31 per barrel.
During the session, Brent reached $98.06, its highest level since July 24.
Trading ended earlier than usual because of the US Labor Day holiday.
Meanwhile, US West Texas Intermediate crude also moved higher. WTI rose about 1.3%, or $1.17, to $92.65 per barrel in afternoon trading.
Earlier in the session, WTI reached $93.29, also marking its highest price since July 24.
Iran Warns of Further Retaliation
Tensions increased after Iranian Parliament Speaker Mohammad Baqer Qalibaf warned that attacks on Iranian assets would trigger retaliation.
His comments appeared to respond to remarks from US Defense Secretary Pete Hegseth concerning the vulnerability of Iran’s oil fleet.
The United States and Iran also exchanged attacks involving oil tankers and warships over the weekend.
According to maritime intelligence firm Marisks, the latest incidents represent another major escalation in the conflict.
The firm warned that commercial tankers are increasingly becoming part of the economic pressure between the two sides.
Oil Supply Concerns Continue to Grow
Oil markets have already reacted sharply to the renewed conflict.
Brent crude rose around 8% last week, while WTI gained nearly 10% as attacks between the United States and Iran intensified.
The conflict has disrupted regional oil supplies and increased concerns that global inventories may come under greater pressure.
In the United States, gasoline and distillate inventories remain well below both year-ago levels and their five-year seasonal averages, according to analysts at PVM Energy.
The analysts said the latest supply picture appears more concerning than it did several weeks earlier.
Middle East Tensions Spread Across the Region
The geopolitical situation worsened further on Monday following Israeli strikes in southern Lebanon.
At least 12 people were killed, according to Lebanon’s health ministry, making it one of the deadliest days of bombardment in the area in recent weeks.
Elsewhere, Saudi Aramco’s Jazan oil refinery was reportedly attacked.
The Financial Times reported that the extent of the damage was still being assessed, citing people familiar with the situation.
The incident added to growing concerns about the security of critical energy infrastructure across the region.
Strait of Hormuz Traffic Falls Sharply
Shipping activity through the Strait of Hormuz has also declined.
According to data from analytics company Kpler, an average of around 10 commodity vessels per day passed through the strategic waterway over the previous 10 days.
That was the lowest level recorded since May.
The Strait of Hormuz is one of the world’s most important energy transit routes. Therefore, any significant disruption could have major consequences for global oil supply.
Priyanka Sachdeva, head of market insights at Phillip Nova, warned that a further slowdown in tanker traffic could lead markets to price in a much larger supply shock.
Goldman Sachs Sees Risk of $120 Oil
Goldman Sachs has warned that oil prices could rise as high as $120 per barrel if attacks on commercial shipping increase.
That scenario would depend heavily on whether disruptions to tanker traffic and regional exports become more severe.
Iran has also said it plans to announce a restricted zone outside the Strait of Hormuz in the coming days.
At the same time, the United Arab Emirates is working to expand alternative routes for energy exports and trade.
UAE presidential adviser Anwar Gargash said the country wants to reduce its dependence on routes that could be disrupted by the conflict between the United States and Iran.
OPEC+ Keeps October Policy Unchanged
OPEC+ added another factor for oil traders to consider after keeping its production policy unchanged for October.
The producer group said on Sunday that it still needs to reach an agreement on new production quotas before determining its next major output steps.
For now, however, geopolitical risks remain the dominant force in the oil market.
With Brent trading near $100 per barrel and shipping activity through the Strait of Hormuz declining, investors are closely watching for any further escalation that could threaten global energy supplies.
