US-Iran Tensions Send Oil Prices Soaring to Six-Week Highs

Oil prices are hovering near six-week highs following a sharp escalation in tensions between the US and Iran. On Saturday, US forces struck three Iranian oil tankers, including one near Kharg Island, which is at the center of Iran's crude-export system.

The incident marked a major escalation in the conflict, with commercial tankers increasingly becoming direct instruments in the confrontation. Maritime intelligence firm Marisks described the attacks as 'a major escalation' because they involve direct action against civilian vessels.

As a result, physical flows are deteriorating, with only 10 commodity ships per day transiting the Strait of Hormuz during the past 10 days, the lowest level since May. The potential price consequences are significant, with Goldman Sachs predicting that crude could reach $120 per barrel if attacks on Middle Eastern shipping intensify.

OPEC+ provided little relief over the weekend, leaving its October output policy unchanged while members work toward new production quotas. Higher oil and record diesel prices are also increasing inflation concerns ahead of important US CPI data later this week, potentially complicating Federal Reserve policy.