Brent crude oil surged back above $90 per barrel on Monday after fresh military strikes erupted between the United States and Iran, marking the first direct exchange of hostilities in a month and reigniting fears of a prolonged disruption to global energy supplies through the strategic Strait of Hormuz [citation:1][citation:9].
The escalation came as US forces struck Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday, targeting Islamic Revolutionary Guard Corps personnel observed preparing to launch sea mines into the critical waterway [citation:7][citation:11]. Iran retaliated within hours by firing missiles at US military installations in Jordan, according to Iranian media reports [citation:1][citation:7].
Brent futures for November delivery climbed 2.94% to $90.69 a barrel on London's ICE exchange, while West Texas Intermediate advanced nearly 3% to $85.77 per barrel [citation:5][citation:10]. The surge marks the fourth consecutive session of gains for crude oil futures [citation:5].
Where do you expect Brent crude to trade by end of week?
2,547 votes castUS Strikes Iranian Island in First Military Action Since July
The US military struck two rocket launcher sites on Iran's Larak Island on Sunday, marking the first direct military action against Iran in a month [citation:11]. US Central Command spokesperson Tim Hawkins confirmed that Iranian forces had been observed preparing to launch rockets carrying sea mines into the Strait of Hormuz [citation:7][citation:11].
Iran's Islamic Revolutionary Guard Corps responded within hours, firing missiles at US military installations in Jordan, according to Iranian state media [citation:1][citation:7]. The IRGC declared that the US would "pay the consequences of this miscalculation in both the economic and military arenas" [citation:11].
Brent-WTI spread widening as Middle East supply risks disproportionately impact global benchmark.
Strait of Hormuz: The World's Most Critical Chokepoint
The Strait of Hormuz, through which approximately 20 million barrels of crude and gas normally pass daily — representing about one-fifth of global consumption — has become the epicenter of the crisis [citation:1][citation:8]. Visible tanker transits fell to just five vessels a day over the weekend, while crude flows past the blockade averaged only 6.7 million barrels per day last week [citation:5].
Analysts warn that the closure of the strait represents the industry's single biggest fear. "Mining the strait has always been this market's single biggest fear, because mines do not distinguish between flags and take months to clear, even the preparation is enough to reprice risk," said Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities [citation:5].
Trump Threatens Economic Warfare
President Donald Trump escalated tensions further by posting on Truth Social that "Kharg Island being blown to smithereens" — referencing Iran's main oil export terminal, which handles approximately 90% of the country's crude exports with a loading capacity of 7 million barrels per day [citation:9].
• US strikes Iranian rocket launchers on Larak Island [citation:7]
• Iran retaliates with missile strikes on US bases in Jordan [citation:1]
• Trump threatens Kharg Island oil terminal [citation:9]
• Treasury Secretary Bessent warns of weekly secondary sanctions on Iran's trading partners [citation:9]
• US commanders warn military operations are "unsustainable" [citation:3]
Treasury Secretary Scott Bessent told Reuters that new secondary sanctions on Iran's trading partners would likely be unveiled on a weekly basis. "We're starting with the banks, and we're telling the banks it's not okay to have Iranian money and to aid the regime," Bessent said [citation:9].
Brent hit intraday high of ~$126 in April. Current rally shows how quickly geopolitical premium can return [citation:9].
Key Levels to Watch
Global Economic Impact
The conflict has already delivered a significant shock to the world economy, with energy-importing countries spending an additional approximately $330 billion on crude oil, petroleum products, and LNG over the past six months compared to pre-conflict forecasts [citation:4]. Every 10% increase in oil prices — provided they persist — pushes up global inflation by 0.4 percentage points and reduces worldwide economic output by as much as 0.2%, according to IMF Managing Director Kristalina Georgieva [citation:8].
African fossil fuel exporting countries have emerged as significant beneficiaries, earning an additional approximately $21.6 billion in revenue between March and August 2026, with Nigeria, Angola, Libya, and Algeria capturing about 84% of this windfall [citation:4].
What's Next for Oil Prices?
Analysts expect Brent to remain within the $85-95 range, but the risk has clearly shifted toward the upper end [citation:5]. The outlook depends on several critical factors:
- Diplomatic Developments: Potential for renewed negotiations or ceasefire agreements
- Strait of Hormuz Access: Any improvement in shipping flows could ease supply concerns
- Sanctions Implementation: Weekly sanctions on Iran's trading partners could tighten supply further
- Military Escalation: Any strike on Kharg Island would remove ~7M bpd from global markets [citation:9]
- OPEC+ Response: Potential for coordinated production increases to offset supply disruptions
Quick Summary
| Brent Crude | $90.69 (+2.94%) |
| WTI Crude | $85.77 (+2.90%) |
| Key Catalyst | US-Iran military strikes |
| Hormuz Flow | ~6.7M bpd (-66% vs pre-war) |
| Market Sentiment | Bullish (65%) |
| Upside Target | $93 - $100 |
| Downside Risk | $85 - $88 |
Bottom line: Brent crude's surge back above $90 reflects the fragile state of Middle East energy supplies as US-Iran military exchanges resume. The Strait of Hormuz remains the critical chokepoint, and any further escalation — particularly threats to Kharg Island — could push prices toward $100. Traders should monitor diplomatic developments while recognizing that geopolitical risk premiums are likely to remain elevated in the near term.
What's Your Outlook on Oil?
Bessent's sanctions threat is the real story here. If China gets hit, Brent could spike to $100+.
34 likesThe military escalation is unsustainable according to US commanders. Expect diplomatic push within 2 weeks.
27 likes$90+ oil is a major inflation risk. Central banks may need to keep rates higher for longer.
41 likes