Oil hits six-week highs as Iran threatens energy infrastructure and Hormuz flows drop to multi-month low

Global crude prices climbed to six-week highs on Monday, propelled by mounting supply security fears after Iran threatened to strike regional energy infrastructure following weekend exchanges of fire with the United States across Gulf maritime corridors.

International benchmark Brent crude rose $1.03, or 1.1%, to settle at $97.31 a barrel in an abbreviated holiday session, after testing an intraday peak of $98.06.

US West Texas Intermediate (WTI) did not formally settle due to the US Labor Day holiday.

Upstream risk premiums expanded after Washington and Tehran traded strikes on commercial tankers and naval vessels over the weekend, erasing distinctions between commercial shipping and military conflict. Maritime bottlenecks worsened as 10-day average commodity transits through the Strait of Hormuz fell to 10 vessels per day—the lowest level since May—while Tehran prepared to designate a new restricted maritime zone outside the waterway.

Physical supply concerns were compounded by reports of an attack on Saudi Aramco's Jazan refinery, alongside depleted US refined product stockpiles, where gasoline and distillate inventories remain significantly below five-year seasonal averages. The persistent supply squeeze prompted Goldman Sachs to project crude spikes toward $120 a barrel if commercial tanker disruptions broaden.

Meanwhile, OPEC+ kept its crude output policy unchanged for October during its Sunday meeting, leaving regional supply tightly bound even as the United Arab Emirates advanced contingency export pipelines to bypass Persian Gulf transit bottlenecks.

Written by: Aiman Haikal