US-Iran strikes escalate oil supply fears

On September 2, 2026, oil prices rose nearly 1% in early trade, extending a sharp rally from the previous session, as the United States and Iran exchanged military strikes overnight, intensifying concerns over supply disruptions in the Middle East. The United States launched a series of airstrikes against targets in Iran, prompting an Iranian response. The Islamic Revolutionary Guard Corps (IRGC) said the U.S. attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carried about one-fifth of global oil consumption before the conflict and which Iran has effectively closed to commercial shipping. The IRGC also claimed to have targeted a U.S. military base in Jordan with ballistic missiles, reportedly killing a large number of U.S. forces, while Iranian state media reported a large-scale drone attack on a U.S. base in Bahrain. Jordan's military said its air defenses intercepted 10 of 13 ballistic missiles, and two U.S. officials reported no American casualties so far. Kuwait said its armed forces were responding to hostile drone activity. The escalation followed a weekend flare-up and attacks on two tankers departing the Strait of Hormuz on Monday, further disrupting oil supplies. U.S. crude inventories fell by 2.6 million barrels in the week ended August 28, according to the American Petroleum Institute, adding support to prices. Brent crude rose 0.92% to $95.52 a barrel, while WTI gained 0.89% to $91.02.