Market Move

Brent crude futures expiring in December surged 5% on Monday, settling at $91.17 a barrel, marking the benchmark's strongest session since the end of July. In the same session, U.S. West Texas Intermediate (WTI) futures expiring in October climbed 3.5% to close at $86.31 a barrel. The price gains contributed to overall oil price advances for August, although the rally was modest compared with the larger surge observed in July.

Geopolitical Trigger

The rally was primarily driven by the first exchange of military strikes in over a month between the United States and Iran, sharply escalating regional tensions. U.S. Central Command reported a "limited, precise action" against minelaying forces of the Islamic Revolutionary Guard Corps in the Strait of Hormuz, which it described as an imminent threat. Iran’s foreign ministry countered that the United States had attacked parts of Larak Island and that Tehran had responded with strikes on U.S. military bases in Jordan; Jordanian state media later said it intercepted and destroyed eight missiles.

Supply Outlook and Analyst Viewpoint

Analysts at ING noted that the renewed hostilities could trigger further rounds of strikes and potentially make shippers hesitant to navigate the Strait of Hormuz, a key chokepoint for global oil flows.

U.S. Venezuela Oil Agreement

Earlier in the week, President Donald Trump announced a U.S. oil agreement with Venezuela, claiming the United States now holds majority control of more than 65 billion barrels of proven Venezuelan oil reserves. Trump described the transaction as "historic," asserting it more than doubles American oil reserves, will substantially lower gas prices for Americans, and will be used to replenish the U.S. Strategic Petroleum Reserve (SPR).

Strategic Petroleum Reserve Inventory Decline

Government data showed that SPR crude oil inventories fell by 3.1 million barrels in the week ending 28 August, bringing the total to 286.6 million barrels – the lowest level recorded since November 1982.

Publication Details

The article, authored by Anuron Mitra with contributions from Ayushman Ojha, Vahid Karaahmetovic, and Roushni Nair, was published by Reuters on 31‑08‑2026 at 05:48 am and updated on 01‑09‑2026 at 02:54 am.