Brent hits one-month high at $84.91 as US strikes Iran, Hormuz at risk

Brent futures rose 18 cents to $84.91 a barrel and West Texas Intermediate gained 26 cents to $79.60 as renewed hostilities in the Middle East intensified fears over supply through the Strait of Hormuz. The strait carries roughly a fifth of the world's oil and liquefied natural gas (LNG), which makes any disruption there a direct input to the prices UK buyers pay.

The move followed a US campaign of overnight strikes targeting Iranian coastal defence systems and missile launch sites, alongside a reinstated naval blockade on Iranian ports. Reuters reported that dozens of targets were hit over a seven-hour operation coordinated with on-ground strikes. In response, Iran's Islamic Revolutionary Guard Corps threatened to close all export corridors benefiting the US and its allies, and claimed strikes on US military targets in Bahrain and Kuwait. The Guardian noted the escalation broke a fragile truce established in June after months of fighting.

The chart below shows Brent over the last six months, against which the latest move to a one-month high can be read.

What this means for UK buyers

Oil does not set your electricity bill directly, but it moves the sentiment that drives gas and power forwards, and Hormuz is a shared route for crude and LNG. If Gulf flows falter, the risk premium feeds straight into NBP gas and, through gas-fired generation, into UK power. For buyers, the question is timing: whether to fix now against a firming curve or hold on flexible arrangements while the situation is unresolved.

Watch these points as the situation develops:

• Brent front-month, currently $84.91 a barrel and at a one-month high
• Any confirmed closure or partial restriction of the Strait of Hormuz
• Iranian crude export volumes under the reinstated US blockade
• Houthi activity threatening the Bab el-Mandeb gateway in the Red Sea
• Goldman Sachs's fourth-quarter Brent scenario above $110 a barrel

The BBC reported Brent has previously traded back above $110 a barrel during acute phases of the conflict, which gives a sense of the upside if disruption widens. Goldman Sachs has projected Brent could exceed $110 in the fourth quarter if the Gulf export recovery stalls, though investors remain cautious and are broadly taking a wait-and-see stance.

The near-term direction hinges on whether the blockade holds and whether Iran acts on its threat to close export corridors. If Hormuz flows are interrupted, expect the risk premium to hold in gas and power forwards; if the truce is restored, much of this week's gain could unwind. Buyers on renewals in the next quarter should track the daily curve rather than the headlines.