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

Oil prices surged past $4 per barrel on Tuesday, reaching a five-week high, as tensions between the US and Iran intensified, raising concerns of possible supply disruptions in the Middle East. Brent futures climbed $4.16, or 4.6%, to settle at $94.65 per barrel, while US West Texas Intermediate (WTI) crude increased $4.46, or 5.2%, to settle at $90.22, marking the highest close since mid-July for both benchmarks.

The US launched new airstrikes on Iranian targets, effectively ending hopes for a limited exchange of fire last weekend that hinted at a temporary lull in hostilities. Despite the US President Donald Trump's warning to hit Iran hard and Treasury Secretary Scott Bessent's announcement of impending new sanctions, Tehran remained firm, threatening to obstruct oil exports from the Gulf.

The US Central Command confirmed that US forces initiated strikes against Islamic Revolutionary Guard Corps (IRGC) targets in Iran, following earlier attacks on commercial shipping and American service members in the Strait of Hormuz. This heightened conflict raised worries about potential disruptions in energy flows through the strategic waterway, as analysts noted that recent strikes on refineries in the Middle East and Russia had already driven diesel prices to record highs.

The market will closely monitor weekly storage reports from the American Petroleum Institute and the US Energy Information Administration to gauge the impact of these developments on global energy supplies.