Oil Price Today Jumps Toward $90 After US and Iran Exchange Fire Near the Strait of Hormuz

Key Takeaways

• Brent crude climbed above $90 per barrel and WTI approached $85 after the United States and Iran exchanged fire for the first time in more than a month.
• US forces struck two Iranian rocket launchers on Larak Island that were allegedly being prepared to deploy sea mines in the Strait of Hormuz.
• Oil’s gains remain limited by recovering Persian Gulf exports, but another attack on tankers or shipping infrastructure could quickly restore a larger geopolitical risk premium.

The oil price today rose more than 2% after renewed fighting between the United States and Iran revived concerns about the security of energy shipments through the Strait of Hormuz.

Brent crude futures climbed approximately 2.5% to around $90.30 per barrel during Monday trading, while US West Texas Intermediate advanced about 2.2% to approximately $85.20.

The gains followed a US strike against Iranian military equipment on Larak Island and a subsequent Iranian missile attack targeting US facilities in Jordan. The confrontation represented the first direct exchange of fire between the two countries in more than a month.

Oil Prices Rise After US Strike on Iranian Launchers

US forces attacked two rocket launchers on Larak Island on August 30. The island lies inside the Strait of Hormuz, close to one of the world’s most important oil-shipping routes.

According to US officials, members of Iran’s Islamic Revolutionary Guard Corps were preparing the launchers to fire rockets carrying sea mines into the waterway. The United States described the operation as a defensive action intended to protect commercial vessels and recently cleared shipping lanes.

Iranian media reported explosions on the island, while the Revolutionary Guard said the strike caused military and civilian casualties. Iran disputed the US explanation and described the attack as a new act of aggression.

Tehran retaliated by launching missiles toward US military facilities in Jordan. Jordanian forces said they intercepted eight incoming missiles, limiting damage from the response.

The exchange marked the first American military action against Iran since late July and interrupted a period in which Washington had increasingly emphasized sanctions and economic pressure.

The fighting also reduced expectations that the regional conflict was moving toward a more stable phase. Although the latest strikes remained limited, the location of the US operation immediately attracted the attention of oil traders.

Why the Strait of Hormuz Matters for Oil Prices

The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Before the conflict, more than 20 million barrels of crude oil and petroleum liquids passed through the waterway each day.

Those shipments included exports from Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, Qatar and Iran. The strait also carried substantial quantities of liquefied natural gas, particularly from Qatar.

Because of its strategic importance, even a relatively limited military incident can increase oil prices. Mines, missile attacks, tanker seizures or damage to port infrastructure could reduce shipments and raise insurance and freight costs without requiring a complete closure of the waterway.

The US Energy Information Administration estimated that oil flows through Hormuz averaged only 4.9 million barrels per day during the second quarter of 2026, compared with 21.6 million barrels per day in the fourth quarter of 2025 before the conflict.

Reduced shipments contributed to an estimated 4.2-million-barrel-per-day decline in global inventories during the second quarter. The EIA expects inventories to fall by a further 3.8 million barrels per day during the third quarter if current disruptions continue.

The possibility that Iranian forces were preparing to deploy additional mines therefore affected more than the immediate military situation. It raised the risk that the recent recovery in Gulf oil exports could stall or reverse.

Recovering Exports Have Limited the Oil Rally

Brent’s move toward $90 was significant, but prices remained below the levels reached during earlier phases of the conflict.

Brent crude briefly traded as high as $105 per barrel in July after attacks on tankers and renewed threats against regional shipping routes. Prices subsequently declined as more oil began leaving Persian Gulf ports and fears of a complete Hormuz closure eased.

Goldman Sachs analysts estimate that total Persian Gulf oil exports have recovered to approximately 15 million to 16 million barrels per day. About 8 million to 10 million barrels may be moving through the Strait of Hormuz, although precise volumes are difficult to verify because some tankers deactivate their tracking systems.

The recovery means the market is not currently experiencing the most severe supply scenario. It helps explain why the latest military exchange produced a rise of slightly more than 2% instead of a return to July’s highs.

Saudi Arabia has redirected some exports through its East-West pipeline to the Red Sea, while the UAE can move crude to its Fujairah terminal through a pipeline that bypasses the strait. Other producers are also exploring new routes toward the Mediterranean and Gulf of Oman.

These alternatives reduce dependence on Hormuz but cannot fully replace its capacity. They are also more expensive and may involve longer shipping times, particularly for crude destined for Asian markets.

Iran’s Response Determines Whether Brent Holds Above $90

The near-term direction of oil prices will depend on whether the latest confrontation remains contained.

The initial Iranian missile response did not appear to cause major damage to US facilities or regional energy infrastructure. That may discourage traders from pricing in an immediate loss of crude supply.

However, the Revolutionary Guard has threatened further retaliation, and commercial shipping remains exposed to missiles, mines and attacks by small vessels. A tanker was reportedly struck near Oman during the latest escalation, although responsibility for the incident had not been established.

An attack that damages a major tanker, export terminal, refinery or pipeline could push Brent further above $90. Evidence that Iran is again placing mines in shipping channels would create an even larger reaction because mine-clearance operations can take time and require substantial naval protection.

Oil prices could retreat if both sides limit further action and commercial traffic continues to recover. In that scenario, the market may again focus on improving export volumes rather than the possibility of a complete disruption.

Higher Oil Prices Add to Inflation Concerns

The renewed oil rally arrives as investors reassess the outlook for US interest rates.

Federal Reserve Chair Kevin Warsh used his Jackson Hole speech to emphasize that inflation remains above the central bank’s 2% target. The market-implied probability of a September rate increase subsequently rose to approximately 57%.

A sustained increase in crude oil could reinforce concerns about headline inflation by raising gasoline, transportation and production costs. It could also make it more difficult for central banks to reduce interest rates, particularly if higher energy prices spread into consumer expectations.

Conversely, another oil-price decline would reduce some of the inflation pressure created by the Middle East conflict and could support expectations that the latest surge in consumer prices will eventually ease.

The connection between geopolitical risk, energy prices and monetary policy means the oil market will remain sensitive not only to events around Hormuz but also to this week’s US employment data.

Oil Price Levels to Watch

Brent crude’s immediate test is whether it can remain above the psychological $90 level. A sustained break could bring $93 into focus, followed by the July recovery area around $95.

If the latest confrontation does not escalate, Brent could fall back below $90 and retest the $88 region. A deeper decline would place the $85 area in focus.

For WTI, $85 is the first important level. Continued geopolitical buying could push the US benchmark toward $87 or $90, while fading supply concerns could return the price toward $82.

The latest US-Iran exchange has restored part of the geopolitical premium removed from oil prices during the previous week. Whether Brent extends its advance will depend less on the initial strikes than on what happens next to tankers, mines and actual export volumes through the Strait of Hormuz.