US-Iran Escalation Sends Oil Prices Soaring Amid Supply Disruptions

Oil prices rose at the start of the week after the first military strikes between the US and Iran in a month, according to ING. ICE Brent briefly surpassed $90 per barrel in early Asian trading following the US strike on Iranian launchers, with Iran retaliating by launching missiles toward a US base in Jordan, which were intercepted.

The escalation raises concerns about prolonged stalemate and potential disruptions to energy flows from the Persian Gulf. Speculators reduced their net long in ICE Brent by 28,299 lots to 223,598 lots as of last Tuesday, driven mainly by longs liquidating during a period of renewed hopes for US-Iran talks and signs of increasing Persian Gulf oil flows.

Russia announced over the weekend it would extend its diesel export ban by another month until the end of September 2026, adding to global diesel supply stress amid Persian Gulf disruptions and Russian fuel issues from Ukrainian attacks on energy infrastructure. European gas prices also strengthened in early trading following the strikes.