US-Iran Tensions Send Crude Oil Prices Soaring to Six-Week High

Crude oil prices surged on Tuesday, reaching a six-week high, as tensions between the US and Iran escalated. The October WTI crude oil contract closed at $4.46 (+5.20%) after two oil supertankers were struck by projectiles while attempting to exit the Strait of Hormuz.

The attacks came after the US targeted Iranian rocket launchers preparing to send mines into the Strait of Hormuz, and Iran retaliated with missile and drone strikes on US air bases in Jordan and the UAE. The conflict has raised concerns about disruptions to energy flows through the strategic waterway.

Russian crude production could also be disrupted further due to Ukraine's intensified drone attacks on Russian oil infrastructure. According to EA Analytics, Russia's crude-processing rates averaged 3.51 million bpd in July, the lowest in 24 years, amid damage to energy infrastructure caused by drone and missile attacks from Ukraine.