Global oil prices surge to a 6-week high after the US strikes Iran in Hormuz

 Oil prices on Tuesday extended their recent increase to settle at their highest levels in nearly six weeks, after the U.S. military said it struck Iranian targets in the Strait of Hormuz in response to Tehran’s overnight attacks on ships transiting the vital waterway, triggering renewed fears of supply disruptions in the region.

The West Texas Intermediate contract for October delivery advanced 5.2% to end at $90.22 a barrel, its highest level in over a month. It was also the largest daily advance for the U.S. oil benchmark since July 29, according to FactSet data.

The November Brent crude contract climbed 4.6% to $94.65 a barrel, also ending at its highest level in nearly six weeks, according to Dow Jones Market Data.

U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran, U.S. Central Command said in a post on X early Tuesday afternoon. The strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region, the U.S. official said.

Also on Tuesday, President Donald Trump threatened more action if Tehran retaliates. “If the failed Nation of Iran retaliates for this very justified attack, they will be hit again at a much harder and higher level,” the president wrote on Truth Social.

Earlier, oil prices edged higher after reports that two oil tankers in the strait were struck by projectiles amid a sharp decline in commercial shipping through the key global energy route. The two oil supertankers were hit in the Strait of Hormuz, according to a Bloomberg report based on information from maritime risk-management consultant Marisks.

“For most of the summer, we’ve been in these very low levels of violence with potential opportunities to open up the Strait of Hormuz and get us into a more normalized environment, but we’re now in this phase where violence has moved higher and we are dealing with potentially more kinetic violence in the region, which disrupts larger supply chains for oil,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

Despite the recent gains in oil prices, he said that oil will not return to the “levels of violence” seen at the start of the conflict, when Brent crude surpassed $110 a barrel.

The market would look past that and “go back to the view that we’re probably going to have this ebb and flow in terms of tensions for the foreseeable future, but it’s not going to lead to a broadening out of regional violence,” Saglimbene told MarketWatch in a phone interview on Tuesday.

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Over the weekend, Washington and Tehran exchanged strikes for the first time in about a month. The U.S. launched strikes on Iran’s Larak Island, and Tehran retaliated by attacking two U.S. military bases in Jordan.

Meanwhile, the technical picture for oil prices has strengthened even further, pointing to more upside in the West Texas Intermediate contract. The U.S. oil benchmark has been making small dips, then moving sideways briefly before rising again. Each time, it has broken through another resistance level and continued higher, according to Fawad Razaqzada, a market analyst for global macroeconomics at Forex.com.

“WTI is now testing the important $86.50-$88.50 region. This area has acted as resistance previously and also coincides with a long-term bearish trend line,” he told MarketWatch in emailed commentary on Tuesday.

But a sustained break above that level would be “technically significant” and could signal the beginning of a much larger move higher, Razaqzada added. The most-active WTI contract ended at $90.22 a barrel on Tuesday, according to FactSet data.