Oil Prices Rise for Third Day as U.S.-Iran Fighting Escalates in Strait of Hormuz

TLDR

• Brent crude rose to $95.55 and WTI hit $90.73 per barrel Wednesday, a third straight day of gains
• The U.S. launched fresh airstrikes on Iranian targets; Iran retaliated with missiles and drones at U.S. bases in Jordan and Bahrain
• Two oil supertankers were struck by unidentified projectiles in the Strait of Hormuz on Monday
• Iranian crude exports have dropped sharply, from around 2 million barrels per day in March to between 220,000 and 255,000 in August
• U.S. Treasury Secretary Scott Bessent said the Strait of Hormuz could become “worthless” within two years as Gulf nations build pipeline alternatives

Oil prices climbed for a third straight day on Wednesday as fresh U.S. airstrikes on Iran and retaliatory attacks from Tehran raised fears about crude supply disruptions from the Middle East.

Brent crude futures rose 0.9% to $95.55 per barrel, briefly touching $97.04 earlier in the session. West Texas Intermediate gained 0.6% to $90.73 per barrel. Both benchmarks had surged nearly 5% the day before.

The U.S. military launched a new wave of airstrikes Tuesday, hitting sites tied to Iran’s Revolutionary Guard Corps near Bandar Abbas and Chabahar. Iran responded with missile and drone attacks on U.S. forces in Jordan and Bahrain.

President Trump said the strikes were retaliation for Iranian attempts to plant mines in the Strait of Hormuz and for earlier attacks on U.S. positions in Jordan. He warned of further, larger strikes if Iran retaliated again.

U.S. President Donald Trump:

“I’m not trying to force Iran to the bargaining table, as ABC Fake News reported. I couldn’t care less if they sign a worthless, to them, agreement. I like our position now much better, with almost total control of the Hormuz Strait, and their… pic.twitter.com/Quq4aNuVu7

— Open Source Intel (@Osint613) September 2, 2026

Iran’s leadership said through state media that it would respond, with U.S. military bases and economic interests in the region listed as potential targets.

Strait of Hormuz Under Pressure

The clashes have raised fresh concerns about oil moving through the Strait of Hormuz, which before the war handled around a fifth of global oil trade.

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On Monday, two supertankers carrying Saudi crude were struck by unidentified projectiles while passing through the strait. Each vessel had loaded about 2 million barrels at Saudi Arabia’s Juaymah terminal.

“We’ve seen oil flow through the Strait of Hormuz despite the stalemate between the U.S. and Iran, but rising tensions clearly put crossings at risk,” analysts at ING said.

The U.S. energy secretary said 17 million barrels moved through the strait on Monday. However, analysts said ship-tracking data pointed to lower volumes.

Iranian Exports Hit Hard

Iranian crude exports have fallen sharply since the conflict began. Reuters reported that loadings dropped to between 220,000 and 255,000 barrels per day in August, down from about 2 million barrels per day in March.

Oil output from the Persian Gulf has recovered to roughly two-thirds of pre-war levels, according to Goldman Sachs. Much of that oil is now moving via pipelines to the Red Sea and the Gulf of Oman.

U.S. Treasury Secretary Scott Bessent said Gulf nations, including the UAE, Saudi Arabia, and Iraq, are expanding pipeline capacity to route oil around the strait. He said the waterway could be “worthless” within two years.

U.S. crude inventories fell by 2.6 million barrels in the week ending August 28, according to the American Petroleum Institute. That reversed a 4.2 million barrel increase the week before.

ING analysts warned that middle distillate cracks, a key fuel margin measure, are likely to stay elevated and volatile, especially as seasonal demand picks up.

The conflict is also adding pressure on U.S. monetary policy. Bets on a Federal Reserve rate hike in September rose to around 70% odds, as energy prices threaten to push inflation higher. The Fed’s September meeting is now closely watched.