Oil Rises for Third Day as US-Iran Clash Escalates, WTI Near $91
Summary
- Fighting between the US and Iran intensified, pushing international oil prices, WTI and Brent crude higher for a third straight trading day.
- Tensions around the Strait of Hormuz, combined with conflict in the Middle East and the Russia-Ukraine war, are heightening concern over supply disruptions in crude and petroleum products.
- The American Petroleum Institute said US crude inventories fell by 2.6 million barrels, adding to upward pressure on oil prices.
Forecast Trend Report by Period
International oil prices rose for a third straight trading day as renewed fighting between the US and Iran fueled concern over potential disruptions to crude shipments through the Strait of Hormuz.
Bloomberg reported on September 1 that West Texas Intermediate neared $91 a barrel. The US benchmark jumped 5.2% a day earlier, its biggest one-day gain in five weeks. Brent settled near $95 a barrel.
The gains were driven by an escalation in hostilities between Washington and Tehran. President Donald Trump said recent US airstrikes were retaliation for what he described as Iran's attempt to lay mines in the Strait of Hormuz and for attacks on US military bases. He added that the US could carry out further strikes if Iran responds again.
Iran retaliated immediately. Tasnim, Iran's semi-official news agency, reported that Tehran fired missiles toward Jordan targeting US bases in the Middle East. Iran's Islamic Revolutionary Guard Corps, or IRGC, claimed the latest clash had further tightened its control over the Strait of Hormuz.
The latest fighting ended a weeks-long lull after the US said it would shift pressure on Iran away from military action and toward economic sanctions. International oil prices rose only modestly last month, but they are now up more than 30% since the war began in late February.
Prices for petroleum products including diesel are climbing faster than crude as conflict in the Middle East overlaps with the Russia-Ukraine war. If tensions around the Strait of Hormuz persist, concerns over supply disruptions for crude and refined products may continue.
Prospects for a decline in US crude stockpiles also supported prices. The American Petroleum Institute said US crude inventories fell by 2.6 million barrels last week. If official data confirms the drop, it would mark the first inventory decline in five weeks.
