Brent Crude Tops $91 as U.S.-Iran Hostilities Intensify

Oil prices continued their ascent in Asian trading after U.S. President Donald Trump threatened further military action against Iran, escalating geopolitical tensions and heightening concerns over potential disruptions to critical energy supplies through the Strait of Hormuz.

Escalating Middle East Conflict

The latest flare-up follows U.S. military strikes on Iranian targets located on Larak Island. According to reports, Iran retaliated by launching missiles at U.S. military facilities in Jordan, prompting a pledge from President Trump for a strong response.

These developments have refocused market attention on the security of the Strait of Hormuz, a vital chokepoint for global oil exports. Underscoring the risks to commercial shipping, the United Kingdom Maritime Trade Operations agency issued a warning on Monday that a tanker had been struck by three projectiles while exiting the strait.

Oil Benchmarks Rally

Crude oil benchmarks extended gains from the previous session, where prices had surged over 3%. The heightened risk premium was reflected in early Tuesday trading:

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• International benchmark Brent crude futures for November delivery rose 0.7% to $91.08 per barrel.
• U.S. West Texas Intermediate (WTI) crude futures climbed 1.0% to $86.60 per barrel.

Broader Supply Concerns

The conflict's impact is currently overshadowing other supply-side developments, including an approved output increase from OPEC+ of approximately 188,000 barrels per day starting in September. Adding to supply tightness in refined products, Russia also extended its ban on diesel exports until September 30.

Meanwhile, the U.S. plans to use oil from a new deal with Venezuela to replenish its Strategic Petroleum Reserve (SPR). The SPR has fallen to near a 44-year low of around 290 million barrels, though the timeline for the arrival of Venezuelan crude remains unclear.