Oil markets rallied sharply on Tuesday as Brent crude futures for November gained 5% to settle at $95.05 a barrel and U.S. West Texas Intermediate (WTI) October contracts rose 5.7% to $90.68 a barrel, the first time WTI breached the $90 level since June 11. The price surge was triggered by renewed U.S.-Iran military tensions. The U.S. Central Command announced it had launched limited, precise strikes against Islamic Revolutionary Guard Corps (IRGC) targets, including a factory in Qeshm and non‑military sites in Hormozgan, marking the first kinetic action since July after a period of strategic impasse over the Strait of Hormuz. Iran responded by striking U.S. military installations in Jordan; Jordanian state media reported the successful interception and destruction of eight missiles, while Iranian state media claimed the IRGC hit Camp Titin, a U.S. Marine base in Jordan, with ballistic missiles. President Donald Trump, posting on Truth Social, warned that any Iranian retaliation would be met with a harder, higher‑level attack.
The escalation heightened concerns over oil supply disruptions. Kpler data showed only five confirmed vessel crossings through the Strait of Hormuz on Monday, and the United Kingdom Maritime Trade Operations reported a tanker was hit by three unidentified projectiles while exiting the strait, underscoring ongoing commercial shipping risks.
Amid the geopolitical shock, OPEC+ announced an additional production quota increase of about 188,000 barrels per day effective from September, completing the planned rollback of earlier voluntary cuts. Separately, Russia extended its diesel export ban until September 30, adding further pressure on refined fuel supplies.
The United States also disclosed a newly announced oil deal with Venezuela, stating that the imported Venezuelan crude will be used to replenish the Strategic Petroleum Reserve, which has fallen to its lowest level in 44 years. The timeline for translating the Venezuelan agreement into additional crude deliveries remains unclear.