WTI Tops $90 Per Barrel on Larak Island Strikes as WCS Climbs to $75.87 for Canadian Oil Sands

WTI crude oil rose to $90.67 per barrel on Tuesday, its first close above $90 since late July, as United States military forces struck Iranian positions on Larak Island in the Strait of Hormuz. Brent crude reached $95.33 per barrel, up $4.73 or 5.23 percent on the day, according to September 1 session data from TradingEconomics. Both benchmarks reversed a multi-session decline that had pulled Brent below $88 during brief diplomatic exchanges between Iran and Oman.

CENTCOM Strikes Larak Island; Iran Fires Missiles at Jordan

US Central Command struck two Iranian rocket launchers on Larak Island on Sunday, describing the action as "a limited, precise action against IRGC minelaying forces posing an imminent threat in the Strait of Hormuz," per OilPrice.com. Iran responded by launching ballistic missiles and drones at US military facilities in Jordan. Jordan's air defenses intercepted eight missiles that entered its airspace. The exchange marked the second confirmed US-Iran military engagement in less than two weeks.

Hormuz Shipping at Near-Zero

Visible commodity-vessel traffic through the Strait of Hormuz fell to five ships per day by Tuesday, from a pre-conflict average near 140 daily transits, according to OilPrice.com. US Central Command reported 83 commercial vessels rerouted, three disabled, and two boarded as of August 30. The collapse in Hormuz transits has displaced the broader crude supply-surplus narrative that held prices lower through most of August.

Kharg Island: 90 Percent of Iran's Exports at Risk

Kharg Island handles 90 percent of Iran's crude oil exports and carries a theoretical loading capacity of seven million barrels per day, according to Kpler data cited by The National News. Iran's actual exports fell from 1.98 million barrels per day in February to 135,000 barrels per day in August under the US naval blockade. President Donald Trump threatened on August 31 to strike Kharg directly, an action that would remove Iran's remaining export capacity almost entirely. A Kharg attack would also affect China, which received roughly 80 percent of Kharg's shipments before the conflict began.

A Full Reversal of the Iran-Oman Corridor Discount

Oil Authority reported Brent at $87.20 per barrel earlier this week as Iran-Oman corridor talks extended a three-session price decline. Those diplomatic contacts have now stalled, replaced by the second military exchange since mid-August. Tuesday's close at $95.33 puts Brent $8.13 above that low in fewer than five trading sessions. Traders who reduced long exposure on the corridor optimism absorbed the full reversal on Tuesday's open.

WCS Climbs to $75.87, Lifting Canadian Oil Sands Netbacks by $7.76 Per Barrel

Western Canadian Select crude settled Tuesday at $14.80 per barrel below WTI, widening from $14.25 the previous Friday, per CalRock brokerage data cited by EnergyNow.ca. With WTI at $90.67, WCS stands at $75.87 per barrel. When WTI last settled at $82.36 and the discount was $14.25, Canadian producers realized $68.11 per barrel from WCS.

The $7.76-per-barrel gain in WCS netbacks is consequential for Canada's largest oil sands operators. Suncor Energy operates Base Mine and Fort Hills and holds a majority stake in the Syncrude joint venture. Canadian Natural Resources is the single largest oil sands producer by volume. Imperial Oil, which runs Cold Lake in situ production and holds a 25 percent Syncrude stake, is 69.6 percent owned by ExxonMobil, making Tuesday's WCS rally a direct gain inside ExxonMobil's consolidated Canadian segment.

At $7.76 per barrel, every 100,000 barrels per day of oil sands output adds $776,000 in daily gross revenue. Over 30 days, that totals $23.3 million per 100,000 barrels per day before royalties, hedges, and operating costs. The gain is partially compressed by the widening WCS-WTI differential, which moved from $14.25 to $14.80 as heavy crude attracted less of the Hormuz-driven geopolitical premium than light sweet benchmarks.

Goldman Q4 Brent Target of $80 Breached by $15.33

Goldman Sachs maintained a year-end 2026 Brent forecast of $80 per barrel, with lead analyst Daan Struyven noting that a 2.3 million-barrel-per-day global surplus remained the central supply risk, per TheStreet. Goldman flagged that chances of prices moving higher had increased but held the Q4 target at $80. Tuesday's Brent settlement at $95.33 sits $15.33 above that figure. The Hormuz disruption has materially eroded the supply-surplus thesis underpinning Goldman's below-consensus call.