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Aug. 31, 2026 10:46AM PST
The price spike interrupted a recent selloff that saw both benchmarks drop more than 4 percent last week.
Robert / Adobe Stock
Crude oil futures surged more than 2 percent to cross the US$90 per barrel threshold on Monday (August 31) morning following a direct military exchange between the US and Iran inside the Strait of Hormuz, reigniting fears over global energy security.
By early trading, Brent crude futures climbed 2.71 percent to US$90.49 a barrel, while West Texas Intermediate (WTI) jumped 2.47 percent to US$85.46.
The escalation began Sunday when US forces conducted targeted strikes against the Islamic Revolutionary Guard Corps (IRGC) on Larak Island, located near the center of the Strait of Hormuz.
CENTCOM characterized the operation as a "limited, precise action" neutralizing an imminent threat to the vital maritime corridor.
Iran retaliated hours later, firing ballistic missiles and drones at US military installations stationed in Jordan. The Jordanian Armed Forces reported intercepting and destroying eight missiles that breached its airspace.
The IRGC confirmed targeting technical infrastructure and fighter aircraft positions at two US bases and warned via state broadcasters that the initial U.S. attack "will be answered by the sons of Iran and will result in the punishment of the aggressor."
US President Donald Trump escalated the rhetoric Sunday evening on Truth Social, posting an AI-generated video depicting Kharg Island "being blown to smithereens."
Iran denied any attack on Kharg Island and stated oil operations there were continuing normally.
Gulf recovery under threat
The first military strike between the US and Iran in weeks now threatens a fragile recovery in Gulf energy exports.
Last week, Goldman Sachs reported that crude and oil product exports from the Persian Gulf had rebounded to between 15 million and 16 million barrels a day. While still below the pre-war baseline of roughly 23 million barrels, the volume marked a sharp improvement from March lows.
However, the maritime chokepoint remains highly volatile. Visible commodity vessel traffic through the strait plummeted to just five ships a day over the weekend. A UK Maritime Trade Operations alert confirmed an unknown projectile struck another tanker transiting the waterway.
The US military also updated its ongoing blockade of Iranian ports, reporting it has redirected 83 commercial vessels, disabled three, and boarded two as of August 30.
US Treasury Secretary Scott Bessent recently stated that sanctions on Iran aim "to create the conditions that they will want to come to the table."
To offset potential supply disruptions and replenish the US Strategic Petroleum Reserve, which recently dropped below 300 million barrels to its lowest point in over four decades, Washington is moving aggressively to tap Venezuelan crude.
Under a new bilateral agreement the US will control a 55 percent stake in a new company granted 100-year rights to tap virgin oil fields in Venezuela.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
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Giann Liguid is a graduate of Ateneo De Manila University with an AB in Interdisciplinary Studies. With a diverse writing background, Giann has written content for the security, food and business industries. He also has expertise in both the public and private sectors, having worked in the government specializing in local government units and administrative dynamics.
When he is not chasing the next market headline, Giann can most likely be found thrift shopping for his dogs.
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