Crude oil prices jumped Monday as renewed U.S.-Iran fighting intensified concerns over energy flows through the Strait of Hormuz, sending Brent crude back above $90 a barrel and West Texas Intermediate above $85. The rally puts geopolitical supply risk back in control of the market, even as weaker demand forecasts and planned OPEC+ production increases threaten to limit further gains.
Brent Crude Breaks Back Above $90
Brent crude futures rose $2.21, or 2.5%, to $90.31 a barrel by 0436 GMT on Aug. 31, while U.S. West Texas Intermediate gained $1.83, or 2.2%, to $85.23. Brent had traded as high as roughly $90.60 earlier in the session.
The intraday Brent chart shows the scale of the repricing. Crude had been trading near $88 before jumping sharply toward $90, briefly reaching above $90.50 before pulling back.
The move followed U.S. strikes on two Iranian launchers on Larak Island in the Strait of Hormuz. Iran subsequently attacked two U.S. air bases in Jordan, according to Iranian media cited by Reuters.
The Kobeissi Letter highlighted the immediate market reaction on X, noting Brent’s move above $90 and pointing to U.S. officials’ explanation that the operation was intended to prevent Iran from deploying sea mines in the strait. Separate reporting said U.S. forces acted after detecting preparations involving rockets and sea mines.
Brent crude oil price surge. Source: TradingView/X
That risk matters because roughly one-fifth of global oil supply moved through Hormuz before the current conflict. Visible commodity-vessel traffic through the strait fell to about five ships per day over the weekend as operators remained cautious about further attacks.
Supply Risk Is Colliding With Weak Demand
The bullish case for oil is being driven primarily by disrupted supply rather than strong consumption.
OPEC and the International Energy Agency remain far apart on the 2026 demand outlook. OPEC expects modest global demand growth, while the IEA sees a substantial contraction as elevated fuel prices and disrupted trade weigh on consumption.
OPEC and IEA 2026 oil-demand forecasts. Sources: OPEC and International Energy Agency.
That disagreement is important for the crude oil outlook. If geopolitical tensions ease and shipping through Hormuz improves, weak demand could quickly become a stronger influence on Brent and WTI.
OPEC+ supply also presents a potential cap. Participating producers are scheduled to raise September output allocations, adding barrels to a market where high prices are already pressuring consumption.
U.S. Oil Inventories Send a Mixed Signal
U.S. inventory data provide another reason not to treat the geopolitical rally as a one-way trade.
Commercial crude stocks rose from about 404.5 million barrels on July 24 to 428.9 million barrels by Aug. 21. At the same time, the Strategic Petroleum Reserve fell from more than 307 million barrels to about 289.7 million, leaving the U.S. with a smaller emergency cushion.
U.S. commercial crude inventories and Strategic Petroleum Reserve levels. Source: U.S. Energy Information Administration
President Donald Trump said Venezuelan oil secured under a new U.S. arrangement would be used to replenish the reserve. However, materially increasing Venezuelan production would require time and investment, limiting its ability to immediately offset disruptions elsewhere.
What Could Push Oil Prices Higher?
For Brent, holding above $90 would keep attention on renewed geopolitical risk and the security of Hormuz shipping. Further attacks on vessels, terminals or export infrastructure could add another supply premium to crude.
The downside case is equally clear. Improving shipping conditions, higher OPEC+ output, weak Chinese demand or a stronger U.S. dollar could pull prices back from current levels.
Brent and WTI are therefore entering September with geopolitical developments carrying unusually large weight. For now, the return of Brent above $90 shows traders are once again demanding a substantial premium for the risk that the Strait of Hormuz disruption could worsen.
