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What is the story about?
Oil prices climbed sharply on Thursday, September 3, after fresh military strikes between the US and Iran ended weeks of relative calm in West Asia and renewed concerns over supplies moving through the Strait of Hormuz.
Brent crude rose to $97.62 a barrel, its highest level since July 27, while West Texas Intermediate crude gained 2.16% to $92.98 a barrel.
Both benchmarks have risen more than 10% this week following the renewed strikes, according to The Wall Street Journal.
The latest US attacks were followed by an Iranian response involving drones and missiles targeting US bases across West Asia, as the two countries continue to contest control of the Strait of Hormuz — the narrow waterway through which a significant share of the world's oil supplies moves.
Fears conflict could drag on
The renewed fighting has also raised concerns that the conflict could last longer than previously expected.
The Wall Street Journal reported that US Defense Secretary Pete Hegseth is quietly extending troop deployments in West Asia, signalling that Washington is preparing for the possibility of a prolonged conflict with Iran.
Oil prices have already climbed nearly 60% this year, while prices of refined fuels such as diesel have risen even faster amid disruptions linked to the conflicts in West Asia and Ukraine.
Oil is still moving through Hormuz
Despite the renewed fighting, US officials have sought to emphasise that crude shipments continue to leave the Arabian Gulf.
The US military escorted 40 vessels carrying 18 million barrels of oil through the Strait of Hormuz on Tuesday.
US Energy Secretary Chris Wright said 17 million barrels passed through the waterway on Monday, with daily flows averaging around 8 million barrels.
The continued movement of tankers is important because the biggest risk to oil prices isn't simply fighting in the region, but a prolonged disruption to shipments through Hormuz.
Saudi exports fall to nine-year low
There are already signs of pressure on regional oil exports.
Saudi Arabia's crude exports fell to around 3 million barrels a day in August, their lowest level in at least nine years, Bloomberg reported, citing tanker-tracking data compiled by Bloomberg, Vortexa and Kpler.
Tankers have come under attack amid heightened tensions in the region, complicating shipments from the world's largest crude-exporting region.
Meanwhile, US crude inventories fell by 4.5 million barrels to 424.5 million barrels in the week ended August 28, according to the US Energy Information Administration, as refinery demand and exports remained strong.
The combination of renewed US-Iran fighting, risks to Hormuz shipments, falling Saudi exports and declining US inventories is keeping upward pressure on crude prices.
Brent crude rose to $97.62 a barrel, its highest level since July 27, while West Texas Intermediate crude gained 2.16% to $92.98 a barrel.
Both benchmarks have risen more than 10% this week following the renewed strikes, according to The Wall Street Journal.
The latest US attacks were followed by an Iranian response involving drones and missiles targeting US bases across West Asia, as the two countries continue to contest control of the Strait of Hormuz — the narrow waterway through which a significant share of the world's oil supplies moves.
Fears conflict could drag on
The renewed fighting has also raised concerns that the conflict could last longer than previously expected.
The Wall Street Journal reported that US Defense Secretary Pete Hegseth is quietly extending troop deployments in West Asia, signalling that Washington is preparing for the possibility of a prolonged conflict with Iran.
Oil prices have already climbed nearly 60% this year, while prices of refined fuels such as diesel have risen even faster amid disruptions linked to the conflicts in West Asia and Ukraine.
Oil is still moving through Hormuz
Despite the renewed fighting, US officials have sought to emphasise that crude shipments continue to leave the Arabian Gulf.
The US military escorted 40 vessels carrying 18 million barrels of oil through the Strait of Hormuz on Tuesday.
US Energy Secretary Chris Wright said 17 million barrels passed through the waterway on Monday, with daily flows averaging around 8 million barrels.
The continued movement of tankers is important because the biggest risk to oil prices isn't simply fighting in the region, but a prolonged disruption to shipments through Hormuz.
Saudi exports fall to nine-year low
There are already signs of pressure on regional oil exports.
Saudi Arabia's crude exports fell to around 3 million barrels a day in August, their lowest level in at least nine years, Bloomberg reported, citing tanker-tracking data compiled by Bloomberg, Vortexa and Kpler.
Tankers have come under attack amid heightened tensions in the region, complicating shipments from the world's largest crude-exporting region.
Meanwhile, US crude inventories fell by 4.5 million barrels to 424.5 million barrels in the week ended August 28, according to the US Energy Information Administration, as refinery demand and exports remained strong.
The combination of renewed US-Iran fighting, risks to Hormuz shipments, falling Saudi exports and declining US inventories is keeping upward pressure on crude prices.
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