Iran and the US exchange more military strikes
September 1, 2026
Iran and the US are again exchanging military attacks, which has the market adding more risk premiums. Yesterday, the US hit Iranian rocket launches, and Iran responded with missiles and drones attacking US air bases in Jordan and the UAE.
Later in the day, crude added in some more upside as reports from AXIOS said that President Trump was weighing limited air strikes on Iran to keep it from rebuilding. Crude prices were a bit contained as despite the renewed attacks as more reports of crude flows thought the Strait of Hormuz are hitting the news. Goldman Sach reported that it saw Gulf exports at 15 to 16 million bpd on Friday. Recent reports since Iran and the US have exchanged attacks have seen less oil flows in the Strait.
Crude supplies are still in good shape and the outlier is distillates. Currently distillate supplies are 14.6% below the five-year seasonal average. Also, you have Russian crude oil processing falling to 3.51 million bpd, the lowest level in 24 years, with the Ukraine drone attacks on refineries a big factor in that number.
Iran’s President said that as soon as the US returns to the MOU (Memorandum of Understudying), Iran will “immediately reciprocate.” I do not like to say it, but this seem like an impossibility at this point This likely means more volatility ahead.