U.S – Iran strikes escalate near Strait of Hormuz as oil tops $90

Oil prices rose sharply on Monday after U.S. forces struck two Iranian launchers on Larak Island in the Strait of Hormuz and Iran retaliated against U.S. military sites in Jordan. The exchange was the first publicly acknowledged U.S.-Iran fighting in about a month and immediately returned attention to the world’s most important oil shipping chokepoint. In a Reuters market snapshot at 09:03 GMT, Brent crude was $91.25 a barrel and U.S. West Texas Intermediate was $86.36.

The U.S. strike targeted launchers that American officials said Iranian forces were preparing to use to deploy sea mines into the strait. Iran later said it had attacked two U.S. bases in Jordan. The United Arab Emirates separately said it intercepted an Iranian drone over its territorial waters, and later condemned the incident as an attack on the country.

The short answer: U.S. forces struck two Iranian launchers on Larak Island, saying IRGC forces were preparing to deploy sea mines. Iran retaliated at U.S. positions in Jordan, the UAE said it intercepted an Iranian drone, and Brent was $91.25 at 09:03 GMT.

What happened on Larak Island?

Larak Island sits inside the Strait of Hormuz, close to the main shipping lanes linking the Persian Gulf with the Gulf of Oman. U.S. officials said Revolutionary Guard forces were preparing to launch rockets carrying sea mines when American forces struck two launchers on Sunday. The Associated Press described the attack as the first U.S. military action against Iran in roughly a month.

The U.S. military described the operation as a limited action against IRGC mine-laying forces that it said posed an imminent threat to civilian mariners and commercial shipping. The Strait remained open to commercial transit, but traffic was already far below pre-conflict levels.

How did Iran respond?

Iran’s Revolutionary Guards said they launched missiles at two U.S. air bases in Jordan in retaliation. Jordan said its air defences intercepted eight missiles that entered the kingdom’s airspace. Iranian claims of heavy damage were not independently verified in the reporting reviewed.

Iran also claimed that U.S. military assets at Al Minhad Air Base in the UAE had been targeted. The UAE did not confirm a strike on the base. Its Ministry of Defence said the UAE Air Force intercepted a drone over the country’s territorial waters approaching from Iran, and the Foreign Ministry later condemned the incident as a hostile Iranian attack. The distinction matters because an intercepted drone is not the same as a confirmed strike on the air base.

Oil prices react as Hormuz risk returns

Crude prices moved quickly after the exchange of strikes. The figures below are a Reuters snapshot at 09:03 GMT on August 31, 2026, not closing prices. They were rechecked before this version was finalised.

Benchmark	Price	Change	Snapshot
Brent crude	$91.25	+3.58%	09:03 GMT
WTI crude	$86.36	+3.55%	09:03 GMT

The Reuters snapshot showed Brent above $91 as markets reacted to renewed military risk around Hormuz. The International Energy Agency says about 20 million barrels per day of crude oil and oil products moved through the strait in 2025, equal to roughly a quarter of global seaborne oil trade.

The U.S. Energy Information Administration also classifies Hormuz as one of the world’s most important oil chokepoints. EIA data show flows through the strait fell sharply during the 2026 conflict, from 21.6 million barrels per day in the fourth quarter of 2025 to 4.9 million barrels per day in the second quarter of 2026.

Why the Strait of Hormuz matters so much

The narrow waterway is the main export route for major Gulf producers and is difficult to bypass at scale. Saudi Arabia and the UAE have pipelines that can reroute some crude, but alternative capacity covers only a fraction of normal Hormuz flows. That makes mines, tanker attacks or a prolonged military confrontation capable of moving oil prices even before physical supply is fully interrupted.

The IEA estimates that 80% of the oil moving through Hormuz in 2025 was destined for Asia, with China and India among the biggest buyers. That gives the security of the strait direct implications for fuel costs, shipping rates and inflation well beyond the Gulf.