Oil approached its strongest close since mid-June as U.S.-Iran hostilities, tanker attacks and Red Sea threats fueled supply concerns and helped drive a broader risk-off move across stocks and bonds.
Oil prices held recent gains and neared their highest close since mid-June as fighting between the United States and Iran intensified concerns about disruptions to Middle East crude flows. Brent crude traded near $89 a barrel and West Texas Intermediate near $83 after both benchmarks rose more than 5% over two sessions. The move followed Iranian strikes over the weekend that killed at least two U.S. soldiers, continued tanker attacks that left shipping through the Strait of Hormuz effectively halted or at a virtual standstill, and threats by Yemen’s Iran-backed Houthis against Saudi maritime shipping in the Red Sea. Saudi Arabia said it would protect its vessels and noted it can use an overland pipeline to move crude to its Red Sea coast, bypassing Hormuz. The escalation also rippled through wider markets, with global stocks and bonds moving lower in a broad risk-off reaction as investors weighed geopolitical disruption, tighter energy supplies, and possible effects on inflation and growth. Diplomatic efforts were still emerging, including a reported proposal for a 10-day halt in attacks by both sides, but prospects for a lasting ceasefire remained uncertain.