On Monday, Brent crude futures for December jumped 5% to close at $91.17 a barrel, marking the strongest daily gain since the end of July, while U.S. West Texas Intermediate for October rose 3.5% to $86.31 a barrel. The rally was triggered by the first exchange of military strikes between the United States and Iran in more than a month, sharply heightening geopolitical tension in the Middle East. Concurrently, traders reacted to President Donald Trump’s announcement of a U.S.–Venezuela oil agreement that he described as the “biggest oil deal in history,” claiming the United States now controls over 65 billion barrels of proven Venezuelan reserves and intends to use the oil to replenish the Strategic Petroleum Reserve. Government data showed SPR crude inventories fell by 3.1 million barrels in the week ending 28 August, leaving a total of 286.6 million barrels, the lowest level since November 1982.
U.S. Central Command reported a limited, precise action against Islamic Revolutionary Guard Corps minelaying forces in the Strait of Hormuz, while Iran’s foreign ministry said the United States attacked parts of Larak Island and Tehran responded with strikes on U.S. bases in Jordan; Jordanian state media confirmed the interception and destruction of eight missiles. President Trump, quoted by Fox News, warned “We’re going to hit them hard. There will be a response,” and posted a video on Truth Social threatening action against Iran’s Kharg Island oil export terminal. In a separate statement he labeled Iran a “failed nation,” noting the absence of a navy, air force, currency, unpaid soldiers and police, 300 % inflation and leadership disarray.
Analysts at ING cautioned that further rounds of strikes could deter vessels from navigating the Strait of Hormuz, adding additional risk to oil shipments. The article was contributed by Ayushman Ojha, Vahid Karaahmetovic and Roushni Nair.