Oil prices surged on Monday, September 7, 2026, due to escalating tensions between the US and Iran. Brent crude futures rose by $0.52 (0.54%) to trade near $96.80 a barrel, while West Texas Intermediate (WTI) was up $0.66 (0.72%) at $92.14 a barrel. Brent crude had already gained 7.8% and WTI nearly 10% in the week ending September 6, following renewed attacks that reduced oil flows through the Strait of Hormuz, a crucial waterway that previously handled one-fifth of the world's oil supply.
The escalation began when the US launched strikes against three Iranian oil tankers over the September 5-6 weekend, destroying one. These strikes were in retaliation for Iranian attacks on American Navy warships with ballistic missiles. In response, Iran's top security official announced that a new restricted zone would be declared outside the Strait of Hormuz in the coming days, extending into parts of the Persian Gulf, starting at the US Navy blockade line. Iran also claimed to have targeted three tankers, though this was not independently corroborated.
The maritime conflict led to a significant drop in shipping traffic through the Strait of Hormuz, with an average of only 10 commodity vessels per day over the past 10 days, the lowest since May. This disruption has caused refined products like diesel to see even steeper price gains, with industrial fuel diesel more than doubling in price this year. US Energy Secretary Chris Wright confirmed that the US naval presence, including a blockade to stymie Iranian oil exports and ensure safe passage for other commercial ships, would not diminish.
Analysts from Goldman Sachs Group Inc. warned that oil prices could rally to as much as $120 a barrel if attacks on shipping in the Middle East intensify. Daan Struyven, co-head of global commodities research at Goldman, recommended that investors hedge geopolitical risks by going long in global natural gas and refined-oil products, as supply shocks are greater in these markets. The prolonged standoff is expected to constrain Middle East oil exports through the rest of 2026, with a return to pre-war throughput not anticipated until late first quarter or early second quarter of 2027.
