Oil up around 2% as renewed US-Iran strikes stoke supply fears

By Robert Harvey

LONDON, Sept 1 (Reuters) - Oil ‌prices rose by ​around ​2% on Tuesday as the resumption of fighting between the United States and Iran in the Middle East renewed fears of supply disruptions from the world's key ‌crude-producing region.

Brent crude futures were up $1.72, or 1.9%, to $92.21 a barrel at 1046 ⁠GMT, while U.S. West Texas Intermediate crude was up $2.12, or 2.47%, to $87.88.

On Monday, U.S. President Donald Trump threatened further ‌strikes against Iran following the first ‌exchange of direct attacks between the countries since late July, raising tensions in a conflict that had recently shifted into an economic standoff.

"The tit-for-tat missile exchanges between the U.S. and ​Iran bring validation to those who believe that even if not a ‘forever war’, this conflict will run and run," said PVM analyst John Evans.

Iran's President Masoud Pezeshkian said on Tuesday ⁠that his country would immediately reciprocate if the U.S. returned to its commitments under the interim peace deal signed in June.

Efforts by ​mediators including Qatar and Oman to broker a deal to reopen the Strait of Hormuz, which carried about a fifth of global oil supplies ​before the war erupted in late February, have so ‌far proven inconclusive.

"Fresh hostilities between the U.S. and Iran raised concerns about prolonged disruptions to energy flows through the Strait of Hormuz," Saxo Bank analyst ⁠Ole Hansen said, adding that a lack of follow-through buying suggests the market is betting on supply not being disrupted more than it is already.

Two supertankers carrying Saudi oil were struck by unknown projectiles within minutes of ⁠each other on Monday while transiting the Strait of Hormuz.

The number of visible commodity vessels transiting the Strait ​of Hormuz held at about five per day on Monday, below the 10-day average of around 14, shipping data from Kpler showed. None of the five ships were liquid tankers.

"The hopes that had emerged last week for ‌an upcoming reopening of the Strait of Hormuz to shipping have been dealt a severe blow. The question is also whether, in the event ‌of a renewed escalation, unofficial vessel traffic through the strait can continue unhindered," Commerzbank analysts wrote.

Analysts polled ⁠by Reuters in August expect oil prices ‌to remain above $80 a barrel ​in 2026 as shipping disruptions continue. [O/POLL]

(Reporting by Robert Harvey in London, Noel John and Sumit Saha in Bengaluru, Emily Chow in Singapore; Editing by Aidan Lewis, ‌Kirsten Donovan)

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