Oil prices rise to six-week highs on worsening Middle East conflict

Oil prices climbed to a six-week high on Monday as Iran threatened to hit energy infrastructure across the Middle East in retaliation for further U.S. attacks on its assets. Brent crude futures surged $1.03, or 1.1%, to $97.31 a barrel, reaching their highest since July 24. West Texas Intermediate crude, not settling on the holiday, rose $1.17, or 1.3%, to $92.65 a barrel.

Iranian officials vowed to retaliate against any U.S. strikes on their oil infrastructure, echoing a threat from U.S. Defense Secretary Pete Hegseth. The United States and Iran have been trading attacks on oil tankers and warships, escalating a conflict that began with U.S. and Israeli strikes on Iran in February. The war has significantly reduced oil supply from the region, forcing nations to use up their reserves.

In the U.S., gasoline and distillate fuel inventories are below year-ago and five-year averages. Iran may declare a restricted zone outside the Strait of Hormuz, and the UAE is building alternative trade routes to avoid the conflict's impact on energy exports. OPEC+ kept its oil output policy unchanged, needing new quotas before deciding on further action.