Brent Breaks $90 as Escalating Middle East Risks Raise Supply Concerns

Crude oil prices continued to climb on Tuesday, August 18, as growing concerns over the Middle East conflict and fresh disruptions near the Strait of Hormuz increased uncertainty surrounding global oil supplies.

October Brent crude had settled $2.35/bbl higher at $90.87/bbl on Monday, while September WTI crude gained $2.10/bbl to close at $84.50/bbl. During Tuesday’s trading, Brent was up by 24 cents, or 0.26%, at $91.11/bbl, while WTI rose 58 cents, or 0.69%, to $85.08/bbl. WTI earlier touched $85.37/bbl, its highest level since July 31.

Oil markets remained supported by weakening hopes for a lasting resolution between the US and Iran. Iran announced plans to move to a “fully offensive” military stance after efforts to end the conflict stalled, while Washington ruled out extending its temporary ceasefire arrangement with Tehran. The worsening relationship has further reduced expectations for a quick restoration of normal shipping through the Strait of Hormuz, where tanker traffic remains severely restricted.

Market participants continue to closely watch developments around Hormuz, as vessel movement through the key waterway remains extremely limited. Fresh security incidents added to supply concerns on Tuesday after a projectile reportedly struck a vessel leaving the Strait of Hormuz. Daily vessel crossings remain in single digits, despite showing some improvement from the weekend.

Tensions have also extended to the Red Sea, where Yemen’s Houthis said they launched missiles targeting vessels, including what they identified as a Saudi military ship and four escort vessels. These developments have added further pressure to an already fragile outlook for regional shipping and energy flows.

Separately, Iran and Oman have been holding discussions over an agreement related to the management of the Strait of Hormuz, with Iran indicating that both sides were close to reaching a deal. However, US President Donald Trump threatened possible military action against Oman in response to the talks, creating additional uncertainty around diplomatic efforts.

Analysts expect oil prices to remain highly sensitive to developments in the region. Without a clear agreement to ease tensions and restore normal shipping activity, supply concerns are likely to continue supporting crude prices. The near-term outlook remains volatile, with crude potentially trading within a broad $80-100/bbl range as uncertainty persists.

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