Oil extends rally above $97 as US-Iran tensions escalate

September 07, 2026 (MLN): Oil prices extended their rally on Monday as escalating military action between the United States and Iran involving commercial vessels intensified fears of a prolonged disruption to crude supplies from the Middle East.

Currently, Brent crude futures is up, 0.88%, at $97.16 per barrel, according to data by Mettis Global.

West Texas Intermediate (WTI) crude futures is up by $0.89, or 0.97%, to $92.37 per barrel by [09:40 am] PST.

Brent crude gained 7.8% last week, while West Texas Intermediate (WTI) advanced nearly 10%, following renewed U.S.-Iran attacks that have sharply reduced oil traffic through the Strait of Hormuz, a critical shipping route that previously handled around one-fifth of global oil supplies, according to CNBC.

The conflict escalated further over the weekend after U.S. forces struck three Iranian oil tankers on Saturday, according to U.S. Central Command. One of the vessels was targeted near Kharg Island, Iran’s major oil export hub.

Iran’s Islamic Revolutionary Guard Corps Navy separately reported targeting three oil tankers using what it described as unauthorized routes through the Strait of Hormuz, along with three additional U.S. vessels in other locations.

Maritime intelligence firm Marisks described the attacks as a major escalation in the maritime conflict, warning that commercial tankers were increasingly becoming targets in the economic confrontation between the two sides.

Shipping activity through the strategic waterway has already fallen sharply. Data from analytics firm Kpler showed that an average of just 10 commodity vessels passed through the Strait of Hormuz each day over the past 10 days, marking the lowest level since May.

Iran is also preparing further restrictions around the waterway. Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, said Sunday that Tehran would announce a restricted zone outside the Strait of Hormuz in the coming days, according to Iranian state media.

Meanwhile, OPEC+ maintained its oil production policy for October at its Sunday meeting, with the producer group indicating that further decisions on output would require agreement on new quotas.

Market concerns are increasingly focused on how long the disruption will persist, with expectations of a prolonged standoff between Washington and Tehran accompanied by limited military action.

Middle Eastern oil exports are expected to remain constrained through the remainder of 2026, followed by a gradual reopening late in the fourth quarter.

A return to pre-conflict oil flows is not expected until late in the first quarter or early in the second quarter of 2027, suggesting that supply concerns could continue supporting oil prices for an extended period.

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