Oil ends week higher on renewed US-Iran strikes, diesel hits record
Published Sat, Sep 5, 2026 · 08:06 AM
[HOUSTON] Oil prices rose on Friday (Sep 4), ending the week substantially higher after the United States and Iran resumed military exchanges in the seventh month of their conflict, while retail US diesel prices hit a record high.
Brent crude futures settled at US$92.68 a barrel, up 76 cents or 0.8 per cent. West Texas Intermediate crude futures finished at US$91.48 a barrel, up 18 cents or 0.2 per cent.
For the week, Brent crude rose 7.6 per cent, while US crude gained nearly 10 per cent as supply routes in the Middle East remain impaired due to the war.
The rally in oil prices combined with a much steeper increase in fuel prices has pushed inflation and government borrowing costs higher around the world and intensified fears that global economic growth might pull back without some relief.
“All sectors of the economy are affected by diesel. This is one of the reasons why the government bond yields in the United States are so high, it’s the expectation that inflation will continue to go up,” said Claudio Galimberti, chief economist at Rystad Energy.
Average US diesel prices hit record highs as renewed US-Iran hostilities and Ukrainian attacks on Russian refineries increased supply disruptions. A gallon of diesel now costs US$5.85 on average in the US, according to AAA data.
The price of diesel could rise even further due to the sharp drawdown in inventories and as agricultural states in various parts of the country head into harvesting and planting seasons. Diesel is a primary fuel for ag equipment. Its equivalent futures contract, heating oil, has also surged as winter approaches.
Citi raised its average Brent crude price forecast for the third quarter to US$86 a barrel from US$80, saying the reopening of the Strait of Hormuz was taking longer than previously expected.
ANZ analysts raised their short-term Brent crude forecast to US$95 a barrel, with upside risk if the Middle East conflict intensifies.
The US economy added 162,000 jobs in August, allaying fears of weakness in the labor market, but bolstering the case for the US Federal Reserve to raise rates later in September.
“The strong employment figures points to an interest rate hike by the Federal Reserve and that was weighing on WTI,” said John Kilduff, partner with Again Capital.
Tanker flows remain impaired
The US government has said Middle Eastern oil flows have returned to near normal levels in recent weeks, but analysts and tanker trackers indicate that flows remain seriously disrupted.
Four commodity vessels transited the Strait of Hormuz on Thursday, well below the 10-day average tally of about 15, preliminary shipping data showed.
“Oil seems to be in a phase where the conflict’s gridlock and recurring hostilities are regularly awakening a risk premium embedded in prices,” said Norbert Rucker, head of economics and next generation research at Julius Baer.
“So far, there is no indication that this week’s escalation materially impacted exports out of the Middle East and tightened the oil market,” Rucker said. “Oil’s current rally seems mostly mood and fear driven.”
US attacks this week that killed and wounded dozens, including Iranian civilians, were the fiercest clashes between the two countries since July.
The US campaign to throttle Iran’s economy by blockading its oil exports and stopping sanctions evasion is growing increasingly difficult to withstand, three senior Iranian sources said.
Iraq increased its August oil exports to about 2.34 million barrels per day from about 1.35 million bpd in July, two Iraqi energy officials said on Wednesday. REUTERS
