Oil Prices Surge Past $91 as US and Iranian Strikes Spark Fears of Middle East Escalation

Oil prices have experienced ongoing volatility since the expiration of a 60-day ceasefire in mid-August, dampening expectations for a restoration of pre-war maritime traffic levels in the Strait of Hormuz.

Brent crude, the international benchmark, climbed more than 1 percent on Tuesday to exceed $91 a barrel, building upon a gain of over 2.5 percent from the previous session. Brent scheduled for November delivery reached $91.44 a barrel by 05:00 GMT, rising from just over $88 a barrel at Monday's market close.

The upward movement followed renewed conflict in the Middle East, triggered by United States strikes on Larak ⁠Island and Iranian attacks targeting two bases utilized by US forces in Jordan.

During a television interview on Monday, US President Donald Trump committed to retaliating against the strikes on the King Hussein and Al Azraq bases in Jordan, telling Fox News that the US would respond forcefully.

Additionally, the United Kingdom Maritime Trade Operations—a monitoring organization operated by the British Royal Navy—reported late Monday that a tanker was struck by three unidentified projectiles while transiting the Strait of Hormuz. The strait serves as a vital passage for roughly one-fifth of global oil supplies during peacetime, and Iranian forces have previously targeted commercial shipping in the area. No casualties were reported, and no government or group has claimed responsibility for the incident.

Following a peak of nearly $94.40 a barrel on August 21, Brent has fluctuated between $86 and $91 since the truce lapsed without a renewal or a permanent peace agreement.

Saul Kavonic, head of energy research at MST Financial, told Al Jazeera that expectations for a near-term agreement to reopen the strait have diminished as the conflict returns to an escalatory path following the latest attacks. Kavonic noted that the oil market is increasingly acknowledging a prolonged 'no war, no peace' scenario characterized by restricted volume flows through the strait, which could persist well into 2027.

Traffic through the Strait of Hormuz remains severely restricted compared to the roughly 130 daily transits seen prior to the war. Many vessels continue to sail "dark" by turning off their Automatic Identification System to reduce the risk of interception by the US Navy or attacks by Iranian drones and missiles. Data from the ship monitoring platform MarineTraffic showed 107 transits between August 24 and August 30, declining from 121 crossings the previous week.

Tony Sycamore, a senior market analyst at IG Markets, suggested that oil prices could decline despite the recent escalation if "dark" shipments through the strait increase again. Sycamore told Al Jazeera that while the short-term path of least resistance for oil points upward due to the risk of further skirmishes, a swift dissipation of the geopolitical premium could occur if shipments and transfers resume by the weekend, keeping the market focused on a day-to-day outlook.