Oil prices jumped more than $4 per barrel on Tuesday, reaching a five-week high as traders reacted to renewed concerns over supply disruptions in the Middle East following increased fighting between the United States and Iran.
Brent crude futures rose $4.16, or 4.6%, to settle at $94.65 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $4.46, or 5.2%, closing at $90.22 per barrel. These were the highest closing levels for Brent since July 24 and for WTI since July 23.
The latest price increase followed new U.S. air strikes on Iranian targets, ending hopes that previous exchanges of fire would not develop into a broader conflict. Oil markets were already under pressure after reports that two tankers were damaged while leaving the Strait of Hormuz, a critical global oil transit route that Iran has effectively closed to shipping.
Middle East Conflict Raises Supply Concerns
Iran has remained defiant, warning that it could prevent oil exports from the Gulf despite threats from U.S. President Donald Trump to respond forcefully to renewed Iranian strikes. U.S. Treasury Secretary Scott Bessent also warned that Washington was preparing additional sanctions.
“The fresh hostilities raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz,” said Saxo Bank analyst Ole Hansen.
The Strait of Hormuz is one of the world’s most important energy chokepoints, with any prolonged disruption potentially affecting global crude oil supplies and increasing volatility across energy markets.
Diesel Prices Reach Multi-Year Highs
Energy markets are also facing pressure from disruptions at refineries, particularly in the Middle East and Russia. These supply challenges have pushed diesel prices significantly higher.
In the United States, diesel futures reached a 52-month high on Tuesday after rising 51% over the past 10 weeks. The increase pushed the diesel crack spread, which measures refinery profit margins, to a record level of approximately $107 per barrel, according to LSEG data.
Additional pressure has come from continued Russian attacks in Ukraine. Authorities reported that Russian air strikes killed 12 people and injured many more in Kyiv and surrounding areas, marking the sixth consecutive day of intense attacks on the Ukrainian capital.
Russia remains one of the world’s largest crude oil producers and is a member of the OPEC+ group of oil-producing nations, making disruptions to its energy infrastructure a significant factor for global markets.
Markets Watch U.S. Oil Inventory Data
Investors are closely monitoring weekly U.S. oil storage reports from the American Petroleum Institute and the Energy Information Administration for signs of changing supply conditions.
Analysts estimate that energy companies removed approximately 0.8 million barrels of crude oil from storage during the week ending August 28. If confirmed, it would represent the first inventory decline in five weeks, compared with a 2.4 million barrel increase during the same period last year.
With geopolitical risks rising and energy markets facing uncertainty, traders are watching developments in the Middle East, refinery disruptions and inventory trends for further direction in oil prices.
