US-Iran Crisis: Why Oil Prices Are Climbing Above $90

Tuesday 18 August 2026 - 08:46

Oil prices continued their upward trend on Tuesday, August 18, for the third consecutive session, in a market once again dominated by geopolitical risks in the Middle East. Investors are now concerned about an extension of the conflict between the United States and Iran following the expiration on Monday of the memorandum of understanding reached in June between Washington and Tehran.

Brent, the international benchmark, has surpassed $91 a barrel, while West Texas Intermediate (WTI) has approached $85. On Tuesday morning, Brent reached $91.76 and WTI $85.55, their highest levels since the end of July.

Washington Provides No Timeline for a Diplomatic Resolution

The oil market is primarily reacting to the uncertainty surrounding the future of negotiations between Washington and Tehran. Donald Trump indicated that the United States was not willing to extend the interim agreement that expired on Monday, while discussions remain stalled on several major issues.

The American administration is also displaying a strategy based on pressure. The blockade of Iranian ports and restrictions on Tehran's oil exports are key levers for Washington. This stance fuels fears of a prolonged confrontation and, consequently, a lasting disruption of energy flows.

U.S. Secretary of Energy Chris Wright has notably defended a patient approach, while diplomatic discussions have not sufficiently bridged the positions of both camps.

The Strait of Hormuz at the Heart of Concerns

At the center of concerns is the Strait of Hormuz, a strategic maritime passage for global energy trade. The deterioration of the security situation has significantly reduced ship traffic in this area.

According to Reuters, only a few vessels crossed the strait over the weekend, with no passage recorded on Sunday. This dramatic drop in traffic raises concerns about Gulf producers' ability to maintain their exports to international markets.

Tensions are not limited to Hormuz. Reported attacks in the region and risks to maritime routes in the Red Sea are increasing the risk premium embedded in crude prices. A projectile notably struck a vessel in the Strait of Hormuz, while attacks attributed to the Houthis have also contributed to heightened risks for maritime transport.

Gulf Producers Seek Alternative Routes

In light of the difficulties faced on traditional routes, Gulf producers are accelerating their efforts to secure their exports.

Saudi Arabia and the United Arab Emirates have infrastructures that allow them to route some of their oil while avoiding the Strait of Hormuz. Saudi Aramco and ADNOC have thus strengthened their supply capabilities to Asia via alternative routes.

These solutions may mitigate some of the immediate risk, but they are not enough to fully neutralize the impact of a prolonged interruption of traffic in the strait. For the markets, the question remains about the duration and extent of the disruptions.

Financial Markets Under Pressure

The rise in oil prices is also beginning to transmit to other asset classes. Investors are particularly monitoring the risk of a resurgence of inflation driven by energy, which could complicate U.S. monetary policy.

Markets are closely awaiting the publication on Wednesday of the minutes from the Federal Reserve's July meeting. The minutes are expected to provide new insights into the internal debates of the central bank and the possible evolution of interest rates.

Gold remains at the center of attention as well. After recently rising amid geopolitical tensions and monetary uncertainty, the precious metal was trading around $4,400 an ounce on Tuesday. Investors are now trying to determine whether the increase in energy prices could sustainably revive inflationary pressures.

A Market Suspended on the Conflict's Evolution

The trajectory of oil will now largely depend on the evolution of relations between Washington and Tehran. A credible resumption of negotiations and a sustainable reopening of the Strait of Hormuz could quickly ease the geopolitical premium embedded in prices.

Conversely, a new military escalation or a prolonged paralysis of maritime traffic would pose an additional risk to global supply. For operators, Brent crossing $90 is thus less a simple market movement than an indicator of growing nervousness over the lack of an immediate diplomatic solution.