LONDON, Aug 31 — Oil prices rose more than 3.5 per cent today after the United States attacked an Iranian island in the Strait of Hormuz and Tehran said it had retaliated, as their conflict extended into its sixth month.
Brent crude futures were up US$3.15, or 3.58 per cent, to US$91.25 a barrel at 0903 GMT, while US West Texas Intermediate crude was up US$2.96, or 3.55 per cent, to US$86.36.
US forces struck two launchers on Iran’s Larak Island in the Strait of Hormuz yesterday, the first known American strikes on the country since late July.
In response, Iran attacked two US air bases in Jordan, Iranian media reported today, citing Iran’s Revolutionary Guards.
“Renewed military strikes in (West Asia) and concerns of further oil supply disruptions have lifted oil prices,” said UBS analyst Giovanni Staunovo, adding that markets will now focus on whether the situation de-escalates or not.
US President Donald Trump said in a social media post yesterday that Iran’s energy hub of Kharg Island is being “blown to smithereens”, but there is no evidence the island was under attack. The post, which included an AI-generated video, provided no details. Iran denied any attack on the island and said oil operations are ongoing.
Efforts to negotiate an end to the conflict remain stalled as mediators seek to reopen the Strait of Hormuz, through which a fifth of global oil supplies passed before the war began at the end of February.
Part of the sharp market reaction reflected thin trading volumes due to a British public holiday, said Saxo Bank analyst Ole Hansen.
Shipping data showed the number of visible commodity vessels transiting the strait over the weekend fell to five a day, highlighting caution among operators concerned about attacks on shipping.
The United Kingdom Maritime Trade Operations agency said yesterday that a tanker had been struck by a projectile while entering the strait on Saturday.
US Treasury Secretary Scott Bessent told Reuters yesterday that the US is likely to impose new secondary sanctions on Iran every week.
Despite today’s rally, Brent and WTI are still on track to post modest losses for August after falling more than 4 per cent last week, their first weekly declines in three weeks.
Trump also said yesterday that oil secured under a recently struck deal with Venezuela would be used to replenish the US Strategic Petroleum Reserve, which has fallen to near its lowest level in 44 years.
