Oil Jumps After Fresh US Strike on Iran, Brent Tops $90 a Barrel

Oil surged after the US directly struck Iran for the first time in about a month, reigniting military tensions around the Strait of Hormuz.

Bloomberg reported on Aug. 30 that November Brent crude climbed above $90 a barrel, while West Texas Intermediate traded around $86. The resumption of military confrontation in the Strait of Hormuz added to supply concerns that have persisted for months amid the Middle East conflict.

The latest rally was triggered by a US attack a day earlier on a rocket-launch site on Iran's Larak Island. Tim Hawkins, a spokesperson for US Central Command, said the site had been preparing to lay mines in the Strait of Hormuz. The strike also shattered a relative lull between Washington and Tehran that had lasted for several weeks.

Oil prices have been highly volatile this month as conditions in the Middle East shifted. Brent futures have traded in a range of about $17 a barrel over the past month. Prices were sensitive to alternating progress and setbacks in negotiations aimed at ending the US-Iran conflict, as well as Washington's pledge to intensify pressure to isolate Iran's economy.

Even so, crude shipments through the Strait of Hormuz have not been fully halted. Traders tracking cargo flows said about 6 million to 8 million barrels a day are still moving through the waterway even without a peace agreement between the US and Iran.

Iran's semi-official Mehr News Agency also said shipping is continuing on a limited basis through routes approved by Iran. Vessels using those routes are reportedly paying transit fees.

Brent futures trading volume may be lighter than usual because some parts of the UK are observing a public holiday that day.