Oil prices surged to their highest levels in roughly three months this week as military exchanges between the U.S. and Iran reignited fears over oil supply through the Strait of Hormuz.
Brent crude settled at $95.85 a barrel, up 8.8% for the week. U.S. West Texas Intermediate settled at $91.22 a barrel, a 9.4% weekly gain.
The price spike came after the U.S. and Iran traded strikes for the first time since July. President Donald Trump said the fighting would not last “too long” and that U.S. strikes targeted infrastructure Iran had been rebuilding around the strait.
BREAKING: New US intelligence warns that Iran can keep the US trapped in this war for months, and may be planning a significant escalation to turn the mounting economic and political costs against Trump, per NYT.
The new intelligence states that Iran believes the US military…
— The Hormuz Letter (@HormuzLetter) September 5, 2026
Iranian state media confirmed Tehran retaliated with attacks on U.S. military bases in the region. Kuwait also reported intercepting incoming Iranian missiles and drones, with its armed forces describing “ongoing Iranian aggression.”
U.S. Treasury Secretary Scott Bessent said the European Union had “officially joined” Washington’s operation to economically squeeze Iran, which he called “Operation Economic Outcast.”
The EU confirmed it had adopted extensive sanctions to stop Iran from using the global financial system. Bessent said the goal was to sever every remaining financial lifeline to the Iranian regime.
Energy Secretary Chris Wright told CNBC that more than 17 million barrels of oil transited the Strait of Hormuz on Monday under U.S. military protection. That figure is a wartime record, though it remains below the roughly 20 million barrels per day that passed through before the conflict began in February.
Analysts at ING noted the rally may lose momentum if Hormuz shipments continue moving without major disruption.
At home, the global oil price surge hit consumers hard. The national average diesel price reached a new all-time high of $5.85 a gallon, topping the previous record of $5.82 set in June 2022.
Patrick De Haan of GasBuddy said record diesel prices raise costs across the supply chain, pushing up prices for groceries, deliveries, and household goods.
The national average gas price stood at $4.1474 a gallon according to AAA.
Vice President JD Vance said gas prices were high because Iran had been attacking commercial ships. He added that prices could have been much higher without U.S. intervention, but declined to promise a return to $3 a gallon.
U.S. commercial crude inventories fell to 424.5 million barrels for the week ending August 28, down from 428.9 million barrels the prior week.
OPEC+ is expected to hold its October output policy steady when members meet Sunday.
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