Oil prices settle up more than $4 a barrel on renewed US-Iran fighting

Oil prices surged over $4 per barrel on Tuesday, reaching a five-week peak, as traders worried about potential supply disruptions from ongoing Middle East conflicts between the U.S. and Iran. Brent futures climbed $4.16, or 4.6%, to $94.65 per barrel, while U.S. West Texas Intermediate (WTI) crude increased $4.46, or 5.2%, to $90.22, marking the highest levels since July 24 and July 23, respectively.

The U.S. conducted fresh air strikes on Iranian targets, dispelling hopes that previous exchanges of fire might not signal a return to full-scale hostilities. Following the weekend battle, reports emerged of two tankers being struck in the Strait of Hormuz, the critical global oil supply route, which Iran had effectively closed to shipping.

Tehran maintained a defiant stance, warning it would obstruct oil exports from the Gulf, despite threats from the U.S. President to retaliate harshly, and warnings from U.S. Treasury Secretary Scott Bessent that new sanctions were imminent. U.S. forces initiated strikes against Islamic Revolutionary Guard Corps (IRGC) targets in Iran, per U.S. Central Command's announcement on social media platform X. The renewed hostilities heightened apprehension about prolonged disruptions to energy flows through the Strait of Hormuz, according to Saxo Bank analyst Ole Hansen.