Oil Prices Hit a One Month High as US Iran Fighting Enters a Third Day

Brent crude has climbed to its highest level since mid June after three straight days of US strikes on Iran and Iranian retaliation across the Gulf, with tanker traffic through the Strait of Hormuz cut by more than half and analysts warning that 100 dollar oil is now a real possibility.

Brent Crude Climbs to Its Highest Level Since Mid June

Brent crude, the benchmark most widely used to price oil around the world, rose about 2 percent on Tuesday, adding to a nearly 10 percent jump the day before. That two day move pushed the price to almost 85 dollars a barrel, the highest level recorded since mid June.

Prices had eased considerably after the United States and Iran signed a peace agreement last month, yet crude is now trading roughly 17 percent above where it stood before the broader conflict began earlier this year. Market data from CNBC and Al Jazeera confirms the same sharp reversal, with Brent futures climbing as fighting resumed around the strait this week after a brief period of relative calm.

US Strikes and Iranian Retaliation Enter a Third Day

The US military has confirmed a third consecutive day of strikes inside Iran, saying the operation is aimed at degrading Iran's ability to threaten civilians and commercial vessels transiting the strait. Iran has responded by saying it struck two oil tankers passing through the waterway and launched missiles and drones at American military sites in Kuwait and Bahrain, a pattern of tit for tat escalation also documented by Reuters reporting carried by US News, which described Iranian forces targeting radar systems and fuel depots across the Gulf region over the same period.

Trump Raises the Stakes With Port Blockade and Transit Fee Threat

President Trump has added to the tension by saying the United States will again block Iranian ports and begin charging vessels a fee to pass through the Strait of Hormuz, positioning Washington as the region's self declared protector. That statement follows a broader pattern seen throughout this conflict, where verbal escalation from Washington has repeatedly moved oil futures within hours, even before any new military action is confirmed on the ground.

Analysts Warn US Emergency Oil Reserves Are Running Thin

An oil market analyst cautioned that the United States is drawing down its own backup oil supplies at a notable pace, and that prices could spike sharply if neither Washington nor Tehran dials back its current rhetoric. This warning matters because strategic reserves have historically served as the main shock absorber during Middle East supply scares, and a thinner cushion means the market has less room to stay calm the next time fighting flares.

Shipping Traffic Through Hormuz Falls to Less Than Half Normal Levels

Vessel traffic through the strait has dropped sharply as a direct result of the fighting. Only 57 ships transited the waterway between Friday and Sunday, less than half the total recorded the previous week, compared with roughly 130 daily transits before the United States and Israel first struck Iran in February. According to the US Energy Information Administration, the strait typically carries around one fifth of global oil and gas flows on an ordinary day, which is why even a partial slowdown of this size registers immediately in global pricing. One analyst noted that current traffic has slowed to levels last seen just before the earlier peace deal, or possibly lower, and warned that the buffer of spare supply which helped keep markets steady during the previous crisis has now mostly been used up, leaving the system considerably more exposed to shocks.

Iran Declares the Strait Closed, but US Escorted Flows Continue

Iran has said the strait is closed until further notice, yet the US Department of Energy reports that 8.5 million barrels of oil still moved through the corridor on Sunday under US military escort, a flow the department characterized as normal. Officials stated plainly that the military intends to keep oil moving regardless of what actions Iran takes, underscoring how much of the current supply picture now depends on active naval protection rather than open, unescorted commercial passage.

Could Oil Reach 100 Dollars a Barrel

A commodity strategist at a major Canadian bank said oil prices could keep climbing significantly, potentially reaching 100 dollars a barrel, if it becomes clear that the threat to supply is real, sustained and still growing rather than a short lived flare up. That scenario would echo earlier phases of this same conflict, when comparable disruptions were estimated by economists to have removed close to a fifth of global oil output from the market at their peak, feeding directly into inflation forecasts and growth downgrades from major institutions. For context, economists commonly estimate that every sustained ten dollar increase in the price of oil shaves roughly four tenths of a percentage point off US GDP growth, which is one reason policymakers in Washington are watching this standoff so closely even as the military situation continues to evolve day by day.