Oil prices jump 4% as fresh US-Iran fighting stokes supply fears
Children wade in the water with cargo ships at anchor in the background and a fisherman nearby, in the Strait of Hormuz off Bandar Abbas, Iran, Jun. 30. AP-Yonhap
NEW YORK — Oil prices jumped about 4 percent to a one-week high on Tuesday as a resumption in fighting between the U.S. and Iran renewed fears of supply disruptions from the Middle East.
Brent futures rose $3.44, or 3.8 percent, to $93.93 a barrel at 1:10 p.m. EDT (1710 GMT), while U.S. West Texas Intermediate crude rose $3.72, or 4.3 percent, to $89.48.
That puts Brent on track for its highest close since August 20 and WTI on track for its highest close since July 23.
The U.S. launched new air strikes on Iranian targets on Tuesday, quashing hopes that an exchange of fire last weekend might not presage a wider renewal of hostilities.
Oil prices had already risen after that first exchange of direct attacks since July and after reports of two tankers being hit leaving the Strait, the global oil supply waterway that Iran has effectively closed to shipping.
Tehran remained defiant, warning that it would prevent oil being exported from the Gulf, despite a threat by U.S. President Donald Trump to hit Iran "hard" in response to the renewed Iranian strikes, and a warning from U.S. Treasury Secretary Scott Bessent that Washington was about to impose new sanctions.
"Today at 12 p.m. ET (1600 GMT), U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran," U.S. Central Command posted on X. "The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region."
The fresh hostilities "raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz," Saxo Bank analyst Ole Hansen said.
Diesel price spike
Disruptions at refineries around the world, especially in the Middle East due to the U.S.-Iran war and in Russia due to Ukrainian attacks, have caused diesel prices to spike.
In the U.S., diesel futures were trading around a 52-month high on Tuesday after soaring about 51 percent over the past 10 weeks, boosting the diesel
crack spread, which measures refining profit margins, to a record high near $106 a barrel, according to LSEG data.
Russian air attacks killed 12 people and injured many more in Kyiv and the surrounding region early on Tuesday, authorities said, marking the sixth straight day of intense strikes on the Ukrainian capital.
Russia was the world's third-biggest crude oil producer behind the U.S. and Saudi Arabia in 2025, according to U.S. energy data, and is a member of the OPEC+ group of countries, which includes OPEC and allies.
U.S. oil inventories
The oil market was watching for weekly storage reports from the American Petroleum Institute trade group later on Tuesday and the U.S. Energy Information Administration on Wednesday.
Analysts estimated energy firms pulled 0.8 million barrels of crude from storage during the week ended August 28.
If correct, that would be the first decline in five weeks and compares with an increase of 2.4 million barrels in the same week last year and an average decrease of 5.1 million barrels over the past five years (2021 to 2025).