US and Iran Trade Strikes Again: Oil Hits $90 a Barrel
The United States and Iran have exchanged direct military strikes for the first time in over a month, ending a fragile pause in a conflict that has now entered its seventh month. The renewed hostilities have jolted global energy markets, pushing crude oil prices to $90 a barrel and raising fresh concerns about supply disruptions from the Middle East [231551].
The escalation began when U.S. forces bombed Iranian rocket launchers near the Strait of Hormuz, a critical waterway that carries about one-fifth of the world’s oil supply [231194][231476]. Washington said the strike targeted Revolutionary Guard units seen preparing to launch rockets carrying sea mines into the strait, a move that would have posed a serious threat to commercial shipping [231476]. Iran responded by firing missiles at U.S. military bases in Jordan and the United Arab Emirates, marking the first confirmed exchange of fire between the two sides since late July [231533][231694].
President Donald Trump has threatened further action, saying the United States will “hit Iran hard” in response to the attacks on its bases [231777]. The European Union, meeting during this week’s G20 summit, issued a statement supporting continued economic pressure on Tehran, endorsing the U.S.-led Operation Economic Outcast, which the White House describes as an effort to sever every remaining economic lifeline supporting the Islamic republic [231777][231550].
The renewed fighting has already had a visible impact on consumers. The average price of gasoline in the United States remains 37 percent higher than before the conflict began, and Dutch natural gas prices jumped nearly 4 percent on Tuesday to their highest level since January 2023 [231551][226565]. In Spain, the consumer price index rose to 4.3 percent in August, the sharpest increase since February 2023, driven mainly by fuel costs [230181]. Diesel prices have gone up nearly 24 percent since June, and petrol by 19.8 percent, according to EU data [230181].
American grain farmers are also feeling the squeeze. The war has triggered a sharp rise in prices for fuel, fertilizer, and crop protection chemicals—key inputs for planting and harvesting—adding fresh strain to the rural heartland just months before midterm elections [226861]. Analysts say the impact will be uneven, with smaller family farms more vulnerable than large agribusinesses [226861].
For Iranians, the situation is even more dire. Many say the new U.S. sanctions campaign feels unnecessary because the country is already in deep economic trouble [231775]. The rial’s value has fallen due to a severe lack of foreign exchange reserves, and food inflation is rising sharply [231775]. The combination of these pressures is making daily life harder for millions [231775].
Negotiations over reopening the Strait of Hormuz have stalled, with both sides rejecting each other’s proposals [231194]. With talks frozen and tensions high, the region remains on edge as the conflict continues to disrupt global markets and daily life far beyond the battlefield [231194][231549].