Brent crude futures settled up $3.66, or 4.7%, at $81.40 a barrel — their highest close since January 2025. U.S. West Texas Intermediate crude rose $3.33, also 4.7%, to settle at $74.56, its strongest settlement since June. Brent has climbed roughly 12% since fighting began on Saturday.
During the session, Brent touched an intraday high of $85.12, the strongest level since July 2024, before trimming gains after President Donald Trump said many Iranian naval and air assets had been destroyed and suggested Tehran’s capacity to sustain attacks would weaken.
The conflict widened on Tuesday as Israeli and U.S. forces struck targets across Iran, prompting Iranian retaliation around the Gulf and in Lebanon. Iraq — OPEC’s second-largest producer behind Saudi Arabia — cut output by nearly 1.5 million barrels per day, with reductions potentially doubling as storage fills due to export disruptions.
Iran has targeted regional energy infrastructure and vessels in the Strait of Hormuz, the chokepoint that handles about one-fifth of global oil and LNG trade. Tankers are avoiding the passage after insurers withdrew coverage, sending global shipping rates sharply higher. Iranian media reported that Tehran would fire on ships attempting to transit the strait, further unnerving markets.
Energy disruptions are spreading. Qatar has halted LNG production, Israel has shut some offshore gas fields, and Saudi Arabia closed its largest refinery. Saudi Aramco is attempting to reroute crude exports via the Red Sea to bypass Hormuz, according to sources.
Refined products rallied sharply. U.S. diesel futures jumped about 10% to their highest since October 2023, while gasoline futures climbed nearly 4% to $2.46 per gallon, the strongest since July 2024. Refining crack spreads surged to their highest levels since 2023.
Global natural gas markets also spiked, with benchmark Dutch, British, European and Asian LNG prices all rising strongly.
The Brent premium over WTI widened to nearly $8 per barrel — the largest gap since November 2022 — a level analysts say supports U.S. crude exports when it exceeds $4.
Traders are also watching U.S. inventory data. The American Petroleum Institute was due to release figures Tuesday, followed by the Energy Information Administration on Wednesday. Analysts expect a 2.3-million-barrel build in U.S. crude stocks for the week ended February 27.
With supply outages mounting and shipping constrained, markets remain highly sensitive to headlines as the conflict threatens deeper and more prolonged disruption to global energy flows.