Brent crude nears $98 as US-Iran strikes raise supply risks

Oil prices climbed to a six-week high on Monday as fresh US-Iran strikes heightened tensions across the Middle East and raised concerns about disruptions to global crude supplies.

Brent crude futures, the international benchmark, rose 1.5% to $97.73 a barrel, reaching $97.93 earlier in the session, its highest level since July 23.

West Texas Intermediate crude gained 1.8% to $93.10, also its highest level since late July.

The latest move higher came as markets assessed renewed military action between the US and Iran, with the conflict threatening to further disrupt oil flows through a region critical to global energy markets.

Saudi oil facility hit

Saudi Aramco facilities were hit in fresh strikes on Monday, according to the Financial Times.

Damage was still being assessed at a facility in Jizan, Saudi Arabia, which is home to a refinery capable of processing 400,000 barrels of crude per day.

It was not immediately clear who was responsible for the attack, according to the report.

The incident adds another layer of uncertainty for oil markets, which were already reacting to a weekend escalation between Washington and Tehran.

The US military struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles at two US Navy warships, according to US Central Command.

CENTCOM said the vessels were part of a “multibillion-dollar shadow network” that funds Iran’s Revolutionary Guard and regional proxies.

Iran’s Foreign Ministry condemned the attacks on commercial vessels as a “war crime” and an act of “economic warfare.”

The latest escalation comes roughly a week after fighting between the US and Iran resumed following about a month of relative calm.

The conflict passed the six-month mark in August.

Oil gains keep inflation in focus

The renewed rise in crude prices is already feeding through to other energy markets.

Gasoline and diesel prices in the US both reached record highs for the Labor Day weekend, adding to the inflationary pressure from higher oil prices.

OPEC Plus also opted on Sunday to keep production unchanged for October, marking the first time since April that the group has decided against increasing output.

The production increases announced in previous months had been largely symbolic, however, as the conflict has disrupted Gulf exports and complicated global oil trade.

Brent has now risen more than 33% since the war began at the end of February, while WTI has gained slightly more than 37%.

The rally follows a sharp reversal earlier this year. Brent surged to around $126 a barrel in late April before falling to just above $70 in early July after a ceasefire agreement between

Washington and Tehran raised hopes of a lasting resolution.

Oil has since resumed its upward trend as those hopes have faded and hostilities returned.

The latest escalation has also prompted concerns over strategic reserves, with analysts warning that continued disruptions could tighten supplies further as stockpiles are drawn down.

Rising oil prices pressure bonds

The oil rally is also spilling into interest-rate markets.

Long-dated government bond yields have moved higher, with 10-year Treasury yields near their highest levels since January 2025.

Longer-dated government bond yields in Europe have also edged higher.

The moves reflect a combination of geopolitical uncertainty and renewed concerns that higher energy prices could make it harder for central banks to bring inflation down.

That has pushed investors to reassess the Federal Reserve’s interest-rate outlook heading into its September meeting.

The market-implied probability of an interest-rate hike stood at around 66% on Monday, up from roughly 41% a week earlier.