Oil prices climbed sharply on Tuesday after the U.S. military announced additional strikes against Iran, intensifying tensions between the two countries.
At 12:34 ET, Brent crude futures for December delivery jumped around 6.7% to $94.30 per barrel.
Meanwhile, U.S. West Texas Intermediate crude futures for October rose approximately 4.8% to $89.88 per barrel.
Both contracts reached session highs as traders reacted to the latest military escalation.
U.S.-Iran Conflict Drives Crude Higher
Oil prices had already settled nearly 3% higher in the previous session.
The latest gains extended a strong rebound as renewed hostilities between the United States and Iran brought the security of the Strait of Hormuz back into focus.
The recent escalation followed U.S. strikes on Iranian military targets on Larak Island, ending several weeks without direct attacks.
Iran later responded by launching missiles at U.S. military facilities in Jordan.
President Donald Trump subsequently pledged a strong response, raising concerns that the conflict could expand further.
Strait of Hormuz Remains Key Market Risk
The Strait of Hormuz continues to be the main concern for global oil markets.
Traders are closely watching whether the escalation discourages tanker operators from using the strategic waterway.
Any significant disruption could threaten the recent recovery in crude oil flows through the region.
The Strait of Hormuz is one of the world’s most important energy shipping routes, making developments there particularly important for global oil prices.
Tanker Attack Highlights Shipping Risks
Concerns increased further after a tanker was reportedly struck by three unidentified projectiles on Monday while leaving the Strait of Hormuz.
The United Kingdom Maritime Trade Operations agency issued a warning about the incident.
The attack highlighted the continued risks facing commercial vessels operating in the region.
Further attacks could increase insurance and transportation costs while potentially reducing tanker traffic.
OPEC+ Output Increase Fails to Calm Supply Concerns
Geopolitical risks have partly overshadowed efforts by OPEC+ producers to increase oil production.
The group approved an additional output quota increase of approximately 188,000 barrels per day from September.
The increase completes the planned rollback of earlier voluntary production cuts.
However, concerns about disruptions in the Middle East are currently having a greater influence on oil prices than the additional OPEC+ supply.
Russia Extends Diesel Export Ban
Fuel supply concerns have also increased following Russia’s decision to extend its diesel export restrictions.
The ban will remain in place until Sept. 30.
Restrictions on Russian fuel exports could tighten refined-product supplies in international markets, particularly if geopolitical tensions continue to disrupt other energy flows.
This has added another layer of support to crude oil and fuel prices.
U.S. Plans to Refill Strategic Petroleum Reserve
Trump also announced that oil obtained under a new agreement with Venezuela would be used to replenish the U.S. Strategic Petroleum Reserve.
The reserve has fallen close to its lowest level in 44 years following years of drawdowns.
As of Aug. 21, the Strategic Petroleum Reserve held approximately 290 million barrels.
However, it remains unclear how quickly the agreement with Venezuela could result in additional crude entering U.S. reserves.
Oil Markets Brace for Further Escalation
For now, geopolitical developments remain the dominant driver of crude oil prices.
Further military action between the United States and Iran could increase fears of disruptions to shipping through the Strait of Hormuz.
If tanker traffic declines or energy infrastructure comes under greater threat, oil prices could remain elevated despite increased production from OPEC+.
Markets will therefore continue to monitor military developments, shipping activity and global supply conditions for signs of the next major move in crude prices.
