Oil up more than 2% as renewed US-Iran strikes stoke supply fears

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Brent crude futures were up $2.17, or 2.4%, at $92.66 a barrel by 1302 GMT, while U.S. West Texas Intermediate crude was up $2.48, or 2.89%, at $88.24.
At that level, the crude contracts had erased most of the losses incurred over the past week on the back of the re-escalation in Middle East conflict.
On Monday, U.S. President Donald Trump threatened further strikes against Iran after the first exchange of direct attacks between the countries since late July, raising tensions in a conflict that had recently shifted into an economic standoff.
"The tit-for-tat missile exchanges between the U.S. and Iran bring validation to those who believe that even if not a 'forever war', this conflict will run and run," said PVM analyst John Evans.
Iranian President Masoud Pezeshkian said on Tuesday that his country would immediately reciprocate if the U.S. returned to its commitments under the interim peace deal signed in June.
Efforts by mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz, which carried about a fifth of global oil and LNG supplies before the war erupted in late February, have so far proven inconclusive.
"Fresh hostilities between the U.S. and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz," said Saxo Bank analyst Ole Hansen, adding that a lack of follow-through buying suggests the market is betting on supply not being disrupted more than it is already.
Two supertankers carrying Saudi oil were struck by unknown projectiles within minutes of each other on Monday while crossing the Strait of Hormuz.
The number of visible commodity vessels transiting the Strait of Hormuz held at about five per day on Monday, below the 10-day average of about 14, Kpler shipping data showed. None of the five ships were liquid tankers.
"The hopes that had emerged last week for an upcoming reopening of the Strait of Hormuz to shipping have been dealt a severe blow. The question is also whether, in the event of a renewed escalation, unofficial vessel traffic through the strait can continue unhindered," Commerzbank analysts wrote.
Analysts polled by Reuters in August expected oil prices to remain above $80 a barrel in 2026 as shipping disruptions continue.
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document fetched 2026-09-02 02:58