Oil prices rise to six-week highs on worsening Middle East conflict
By Shariq Khan
NEW YORK, Sept 7 (Reuters) - Oil prices rose to a six-week high on Monday as Iran vowed to strike energy infrastructure across the Middle East in response to further U.S. attacks on its assets, the latest escalation in a conflict that has sharply reduced oil supply from the region.
Brent crude futures rose $1.03, or 1.1%, to settle at $97.31 a barrel, after hitting their highest point since July 24 at $98.06. Brent futures settled around 1:30 p.m. EDT (1730 GMT), about an hour earlier than their usual settlement time due to the Labor Day holiday in the United States.
U.S. West Texas Intermediate crude, which will not settle on Monday due to the holiday, was up 1.3%, or $1.17, at $92.65 a barrel by 1:45 p.m. EDT. WTI futures earlier rose as high as $93.29, also the highest since July 24.
"Strike our assets and you get struck," Iranian Parliament Speaker Mohammad Baqer Qalibaf said on Monday, in what appeared to be a response to U.S. Defense Secretary Pete Hegseth's warning that Tehran's oil fleet was "defenseless".
The United States and Iran traded strikes on oil tankers and warships over the weekend, marking a major escalation of the war between the two countries that began when the U.S. and Israel struck Iran on February 28, maritime intelligence firm Marisks said.
"Commercial tankers are now being deliberately used as instruments of reciprocal economic pressure, substantially weakening the previous distinction between military confrontation and commercial shipping," Marisks said.
Brent rose around 8% last week and WTI gained nearly 10%, after the U.S. and Iran resumed attacks. The war has taken a heavy toll on global oil supply, forcing nations to burn through stockpiles to avoid deficits.
In the United States, the largest oil producer and consumer, inventories of gasoline and distillate fuel are substantially below year-ago and five-year seasonal averages, PVM Energy analysts noted.
"The current roundup indicates a slightly more dire picture than the last time we took stock a few weeks ago," they said.
WORSENING TENSIONS
Regional tensions were also heightened by Israeli strikes on a town in southern Lebanon that killed at least 12 people on Monday, according to the Lebanese health ministry, marking one of the deadliest days of bombardment in recent weeks.
Elsewhere in the Middle East, Saudi Aramco's Jazan oil refinery was attacked on Monday and damage was being ascertained, the Financial Times reported, citing two people with knowledge of the matter.
A week ago, a Saudi-owned tanker was attacked by Iran, with Saudi Arabia saying two seafarers had died. Oman said on Monday it had evacuated 16 crew members from the tanker.
An average of 10 commodity ships transited the Strait of Hormuz per day over the past 10 days, the lowest since May, data from analytics firm Kpler showed on Monday.
"If tanker traffic begins to slow materially, the market could price in a much larger supply shock. And there are already signs that this is happening," said Priyanka Sachdeva, head of market insights at Phillip Nova.
Goldman Sachs said oil prices may rally as high as $120 a barrel if attacks on shipping rise.
Iran will announce a restricted zone outside the Strait of Hormuz in the coming days, said Mohsen Rezaei, the secretary of Iran's Supreme National Security Council.
Meanwhile, the United Arab Emirates is building alternative routes for its energy exports and trade to ensure they are not "held hostage" by the war between the U.S. and Iran, UAE presidential adviser Anwar Gargash said on Monday.
OPEC+ kept its oil output policy unchanged for October at a meeting on Sunday, the producer group said in a statement, as it needs to agree on new quotas before deciding its next output steps.
(Reporting by Shariq Khan, Shadia Nasralla; Additional reporting by Florence Tan, Sam Li and Anushree Mukherjee; Editing by Susan Fenton, Jan Harvey, Edmund Klamann and Cynthia Osterman)
Brent Approaches $100 as Markets Assess Iran Threats to Gulf Energy Infrastructure
Oil prices extended their advance on Tuesday, with Brent crude approaching $100 a barrel as markets assessed the risk of further disruption to Middle East energy supplies following Iranian warnings about potential retaliation against oil and gas infrastructure in the Gulf.
November Brent Oil Futures rose 1.6% to $98.73 a barrel by 02:59 ET (06:59 GMT), while U.S. West Texas Intermediate (WTI) crude futures gained 2.9% to $94.14 a barrel.
Brent settled nearly 1% higher on Monday after briefly reaching $98 a barrel during the previous session.
Iran Warns of Retaliation Against Energy Assets
The latest increase in oil prices followed Iran's threat to respond to what it described as U.S. "economic warfare" by establishing a maritime exclusion zone across the Persian Gulf.
The warning followed a series of strikes between the United States and Iran over the weekend, including attacks involving shipping.
Iranian officials subsequently warned that U.S. oil and gas interests and other energy infrastructure in the Gulf could be targeted in retaliation for attacks on Iranian assets.
"The oil and gas production chain here is sprawling, accessible, and exposed. American oil and gas companies across these waters and facilities share that exposure," Iranian Parliament Speaker Mohammad Baqer Qalibaf said.
"Strike our assets, and you get struck. We've already proven it," he added.
The statements represent Iranian warnings about potential retaliation rather than confirmation that such attacks will occur.
Strait of Hormuz Remains in Focus
The Strait of Hormuz remains a central consideration for oil markets because of its role in regional energy shipments.
Iran has said it plans to establish a new restricted zone in the Gulf and an alternative shipping corridor. Markets are assessing whether any changes to maritime controls could affect tanker traffic through the waterway.
Mohsen Rezaei, secretary of Iran's Supreme National Security Council, said on X that Washington had received a "clear warning" from Iran's new missiles and that further economic pressure would be met with a maritime exclusion zone extending across the Gulf to the perimeter of the U.S. blockade.
Iran also said an agreement with Oman over arrangements for the Strait of Hormuz was close. Such an agreement could provide a mechanism for addressing shipping disruptions, although the supplied information does not indicate that a final deal has been reached.
Brent Extends Recent Advance
Oil prices have risen during the U.S.-Iran confrontation, with Brent gaining 8% last week and WTI advancing nearly 10%.
The latest move has taken November Brent futures to $98.73 a barrel, leaving the benchmark close to the $100 level.
Further movements in crude prices will depend on developments affecting regional energy production and shipping, alongside the outcome of diplomatic discussions concerning the Strait of Hormuz.
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