International oil prices face a four-pronged assault!

The U.S.-Iran rivalry continues to escalate: Iran has activated its 'dual-strait strategy,' heightening shipping risks in both the Strait of Hormuz and the Bab el-Mandeb Strait. Compounded by Hurricane impacts in the Gulf of Mexico, global oil reserves have been nearly depleted—leaving international oil prices under a four-pronged assault. Strait of Hormuz: With what will Iran close the 'illegal waterways'? The U.S. is helping more tankers pass through the southern route off Oman’s coast—the so-called 'strait-running' maneuver. According to the latest data from market intelligence firm Kpler, crude oil throughput across the Strait of Hormuz averaged 10.3 million barrels per day during the week of September 27–October 3—recovering to 76% of pre-war baseline levels. U.S. Energy Secretary disclosed an even higher figure on television news: nearly 13 million barrels per day. Trump even claimed 22 million barrels passed through on October 6! On October 7, U.S. Secretary of State Rubio announced in Athens: 'Iran has completely lost control over the Strait of Hormuz.' Iran must act! On the same day, Naghdi, senior advisor to the Commander-in-Chief of Iran’s Islamic Revolutionary Guard Corps (IRGC), stated that the Strait of Hormuz was 'closed' and that Iranian armed forces held 'full control' over it. Those 'illegal waterways' would 'soon be shut down.' Shortly thereafter, an oil tanker located 51 nautical miles north of Qatar’s northern coast came under attack with 'multiple munitions.' Maritime agencies assess that Iran has expanded its 'firing range for strait blockade' into the interior of the Gulf—including the sea lanes leading to the southern passage. Moreover, Iran may also be laying naval mines! In the early hours of October 9, Al Jazeera reprinted Iranian media reports stating that multiple tankers struck mines and exploded in the southern channel of the Strait of Hormuz. Who dares enter the minefield? If the volume of oil surreptitiously passing through the Strait of Hormuz drops sharply, will oil prices react? Bab el-Mandeb Strait: The Houthis besiege Yemen’s 'heart'! Taiz—the third-largest city in Yemen—was once the historic capital. Perched atop a highland plateau, it overlooks the coastal plains like Shanxi Province overlooking North China, commanding vital north-south transportation routes—and thus earning the moniker Yemen’s 'heart.' Defenders are Salafi tribal militias, religious arch-rivals of the Zaydi Houthi movement; their blood feud dates back ten years of civil war. This time, rather than launching a frontal assault, the Houthis first launched a surprise attack on the Bab el-Mandeb Strait, seizing the port of Mocha to divert Yemeni government forces’ attention. Then, feigning an assault on Taiz’s main front line, they executed a flanking maneuver—covering over 100 kilometers in 36 hours—to capture Turba, the critical logistics chokepoint south of Taiz. By cutting off food and supply lines to defending forces, the Houthis now stand poised to force Taiz’s surrender. Foreign media report that several major tribes along the southern Taiz–Al-Lahj provincial border have already reached agreements with the Houthis: if they lay down arms, their property will not be confiscated, and past grievances will be forgiven. For Saudi Arabia, this is extremely bad news. Losing Taiz means government forces along the Bab el-Mandeb Strait will face Houthi attacks from elevated terrain—and simultaneous pincer assaults. Losing Taiz could also sever road access to Aden—the interim capital of Yemen. Aden, a metropolis of one million people situated on the coast, suffers severe freshwater shortages and cannot afford desalinated seawater. It relies entirely on groundwater drawn from mountain valleys in the north, piped into the city. Likewise, fuel for Aden’s power plants must be transported by road. This implies Aden may soon face total collapse—starvation, thirst, blackouts, and fuel shortages…

U.S.-Iran tensions explode at the UN General Assembly, sending oil prices soaring and U.S. Treasury bonds plunging into the 'gates of hell'!

Now, with the Strait of Hormuz still closed, Iran—leveraging Houthi forces—has seized control of the Bab el-Mandeb Strait. The U.S.-Iran war remains the top variable driving financial markets. On September 17, Yemen’s Houthi movement continued its offensive, prompting Saudi Arabia to urgently appeal to Trump for assistance. The U.S. agreed to provide intelligence sharing and target identification support. Over one hundred military intelligence personnel have already deployed to Saudi Arabia, using satellite imagery to guide operations—but Riyadh remains unsatisfied. According to The New York Times, after another phone call with Saudi Crown Prince Mohammed bin Salman, Trump reportedly instructed the Pentagon to prepare airstrikes against the Houthis. On the same day, the U.S. State Department approved the sale of 48 F-35A stealth fighter jets and associated systems to Saudi Arabia, valued at $24.3 billion. At over $500 million per aircraft—including all ancillary costs—the deal is priced at roughly six times the U.S. military’s own procurement cost. Moreover, the first batch won’t be delivered until as late as 2029. Trump told reporters the Iran war was approaching a critical juncture—whether to resume large-scale attacks to end the conflict. Launching U.S. airstrikes against the Houthis—opening a second front—would likewise constitute a critical juncture. In truth, Trump does not wish for U.S. forces to operate on two fronts simultaneously—but the Saudi royals offered too much! F-35s have never been sold at such exorbitant prices! Saudi Arabia not only accepted a 'downgraded' version without discounting—it even paid a premium! And it showed no concern about the earliest possible delivery date of 2029, implying it wouldn’t mind waiting several more years! For such a perfect customer, how could the U.S. refuse even modest requests? Yet just as U.S. aircraft were arming bombs and receiving final approval for strike targets, readying for takeoff—Trump reversed course! On the same day, the U.S. government suddenly approved visas for Iranian President Pezeshkian, Foreign Minister Araghchi, and other core delegation members—permitting them to attend the United Nations General Assembly in New York. Was this a 'trap to lure the tiger into the mountain'? Or an overture toward peace talks? U.S. oil prices answered—plummeting. Markets interpreted this as signaling Washington and Tehran’s mutual intent to pursue peace. With less than six weeks remaining before the midterm elections, if Trump can quickly rein in oil prices, voters might still fill up their tanks with cheaper fuel before heading to the polls… On September 20, Trump stated that the U.S. maintains communication channels with Yemen’s Houthis, who have agreed not to engage the U.S. militarily. Meanwhile, Houthi offensives against Yemeni government forces have also noticeably eased. On September 21, Iran’s foreign minister arrived in New York. On September 22, Iran’s president arrived in New York to attend the UN General Assembly. After opening remarks by the UN Secretary-General and the President of the General Assembly, Brazil—the first member state—delivered its speech. Trump, as host-country president, spoke second! He warned that, should no agreement ending the conflict be reached, the U.S. could swiftly 'destroy' Iran. He predicted the U.S. government would reach a deal with Iran to end hostilities after the November midterm elections. He further urged other nations to join the U.S. in economically isolating Iran—forcing it back to the negotiating table. As he spoke, Iran’s president walked out of the hall with his delegation, leaving only a low-ranking official to listen—an unsurprising protest against Trump. Almost simultaneously, in a room elsewhere at the UN, Iranian Foreign Minister Araghchi held a three-hour secret meeting with U.S. Presidential Envoy Witkoff—at Washington’s request (mediated indirectly by Qatar). Trump stated that the U.S. and Iran had held a 'very good' and 'highly constructive' dialogue.

Oil Extends Advance as US-Iran Escalation Revives Hormuz Risks

Aug 31, 2026

Oil prices surged amid escalating US-Iran tensions threatening Strait of Hormuz transit, with WTI exceeding $86 and Brent near $90 as traders anticipate prolonged supply disruptions.

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Oil Extends Advance as US-Iran Escalation Revives Hormuz Risks

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