Crude oil futures posted their largest gain in three weeks as a sudden escalation in Middle East hostilities heightened concerns over supply disruptions. The United States and Iran traded attacks for the first time in about a month, with the confrontation showing little sign of abating in the near term.

West Texas Intermediate (WTI) climbed 2.8% to settle near $86 a barrel. The trigger was a U.S. military strike on an island in the Strait of Hormuz, which prompted Iran to retaliate with attacks on the United Arab Emirates and Jordan. The renewed conflict has stoked market fears that a prolonged military campaign could further disrupt shipping through the strategic waterway, a vital conduit for global crude flows.

Oil futures are wrapping up another highly volatile month, with WTI's trading range approaching $15 a barrel. As part of its economic pressure campaign, Washington has maintained a naval blockade on Iranian ports, curbing Tehran's crude exports. However, according to traders tracking cargo movements, roughly 6 million to 8 million barrels of oil—mostly from other Gulf producers—continue to transit the Strait of Hormuz daily.

These steady shipment volumes have helped temper further price spikes despite the uncertain war outlook. Several current and former U.S. and Iranian officials indicated they expect the conflict to persist for months, with neither side able to break the stalemate.

Ole Hansen, head of commodity strategy at Saxo Bank, noted: "The crux is the oil flow. As long as crude continues to move through the Strait of Hormuz, buyers will remain cautious, because traders are wary of chasing prices higher."

October-delivery WTI rose 2.8% to settle at $85.76 a barrel, while November-delivery Brent gained 1.3% to end at $90.49 a barrel.