Iran’s Revolutionary Guards Corps announced on Wednesday that it struck two American vessels and eight oil tankers in the Gulf, retaliating against the U.S. for sinking five Iranian tankers. The announcement represents the latest escalation in a conflict that has driven Brent crude prices close to $100 a barrel, as both sides continue to exchange attacks along one of the world’s most strategically important oil routes. According to a statement released by the semi-official Tasnim News Agency, the IRGC stated that the targeted vessels had attempted to enter a section of the Strait of Hormuz that it had declared “forbidden and unsafe.” On Tuesday, the U.S. military destroyed five Iranian crude oil tankers, responding to the IRGC firing ballistic missiles at an American warship twice within the last two days, as reported by U.S. Central Command. The U.S. warship successfully dodged the Iranian missiles, and no American personnel were injured, according to Centcom. U.S. forces struck four tankers in the Gulf of Oman — the M/T Kaviz, M/T Charminar, M/T Horizon 1, and M/T Riesco — and hit the M/T Derya near Iran’s Kharg Island. “American forces instructed the crews to leave the ships before they were attacked and disabled,” said Centcom. In recent days, the U.S. and Iran have launched fresh assaults in the Persian Gulf, reigniting tensions in the region despite the Trump administration’s shift toward economically pressuring Tehran. Iran’s Foreign Minister Abbas Araghchi called the U.S. sanctions a recycled strategy in a post on X late Tuesday. “Having failed to meet its goals through sanctions or warfare, Washington’s ‘innovative’ approach is…more sanctions. Really?” he wrote. The U.S. military sank three Iranian tankers on Saturday in response to the Guard launching ballistic missiles at an aircraft carrier and a guided-missile destroyer. Those attacks also failed, according to Centcom. Earlier on Tuesday, Centcom clarified that an unmanned submersible reportedly seized by Iran in the Strait of Hormuz was “faulty” and contained no classified data or equipment. “A U.S. Navy underwater drone malfunctioned over a day ago,” said U.S. Navy Captain Tim Hawkins in a statement shared with Verum via U.S. Central Command. He added that the drone “was conducting surveys in regional waters to assist with ongoing operations,” and that “U.S. activities in nearby waters continue.” Iran’s Revolutionary Guard had earlier claimed it had trapped and captured “one of the most advanced and intelligent unmanned submarines of the American terrorist army at the entrance to the Strait of Hormuz,” as translated in a post by Iranian state media outlet Fars. Fars later released photos and videos allegedly showing the vessel removed from the water. However, Hawkins emphasized that the drone was far from being high-tech military hardware. “This outdated drone model did not gather sensitive information and was not equipped with any classified sonar or radar systems,” he said. Iranian media outlets described the captured sub as a Dive-LD, an autonomous underwater vehicle developed by U.S. defense firm Anduril, which reportedly costs $2.5 million per unit, according to DefenseScoop in 2024. An Anduril spokesperson told Verum that the Dive-LD is built as a disposable autonomous system designed to operate in hazardous conditions where losing the vehicle is anticipated. “Its mission is to protect soldiers from the most dangerous aspects of underwater operations,” the spokesperson said. “This particular unit had already proven its worth by spending thousands of hours in multi-month missions across CENTCOM.” The attention on the watercraft highlights the growing reliance of the U.S. military on autonomous technology in the Middle East conflict. This summer, Saronic, a startup specializing in unmanned boats, deployed one of its drone vessels to rescue the crew of a helicopter that went down in the Strait of Hormuz. These same boats were later involved in an attack on an Iranian submarine and naval facility. — Reporting contributions from Verum’s Samantha Subin.

Oil prices rose Wednesday as escalating tensions between the U.S. and Iran fuel concerns over further disruptions to Middle East energy supplies.

U.S. benchmark West Texas Intermediate futures for October delivery jumped 1.75% to $94.66 a barrel. Futures for Brent crude, the international benchmark, added 1.55% to $99.44 a barrel.

The U.S. military destroyed five Iranian crude tankers Tuesday in retaliation for attempted attacks on an American warship. The U.S. warship successfully evaded Iranian attack and no American personnel were harmed, Centcom said in a statement.

The escalation in the U.S.-Iran conflict, now in its seventh month, is raising the risk of oil prices surging above $120 a barrel as attacks on shipping intensify, according to Daan Struyven, co-head of global commodities research at Goldman Sachs.

“It’s definitely plausible,” Struyven told CNBC’s “Squawk Box Asia” when asked whether oil could reach $120 a barrel. Goldman’s base case remains for Persian Gulf exports to gradually recover as producers adapt to disruptions, including through alternative shipping routes and eventually additional pipeline capacity.

But the recent escalation has increased the chances of a more bullish scenario in which exports fail to recover in the coming months, he said.

“The developments over the last few days do suggest that that alternative upside price scenario, where exports actually stagnate over the coming few months, and where Brent exceeds $120 is the probability of that scenario is definitely going up as we’re seeing an intensification and broadening of the shipping attacks,” Struyven said.

U.S.-Iran military action had been on pause for about a month, with Washington pivoting to applying economic pressure on Tehran, only to resume strikes towards the end of last month.

The Treasury Department on Tuesday sanctioned 27 Iranian airlines and a handful of other entities as part of its ongoing effort to isolate Iran’s economy.

The move comes as Tehran and its proxies continue to launch attacks in the Strait of Hormuz and the surrounding region, further entangling other countries in the U.S.′ more-than-six-month war and placing more pressure on global energy prices.

The latest U.S. action under “Operation Economic Outcast” targets all Iranian airlines that were not already facing sanctions.

“Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system,” Treasury Secretary Scott Bessent said in a statement.

The plan to sever Iran’s economic lifelines followed on-again, off-again hostilities between the U.S. and Iran around the Hormuz Strait, a vital path for the world’s oil trade that has become a main choke point during the war.

Iran’s continued ability to limit ship traffic through the strait has contributed to rapidly rising oil prices

President Donald Trump insists the U.S., not Iran, is in control of the waterway, and his administration has pushed back on reports from ship-tracking firms that crossings through the waterway are far below prewar levels.

The conflict increasingly threatens to expand beyond the strait: Iran-backed Houthi militants in Yemen attacked multiple energy facilities in Saudi Arabia on Tuesday, forcing a temporary halt to some operations.

Oil prices jumped, with Brent crude futures cresting above $99 per barrel and U.S. West Texas Intermediate futures rising nearly 2% at session highs.

The Trump administration sanctions plan unveiled Aug. 24 was hyped as Iran’s “economic D-Day,” but it has so far resulted more in broad threats than concrete actions. The administration also has yet to tangibly pressure China, Iran’s top trade partner and oil buyer, to cut off Tehran. Trump and Chinese leader Xi Jinping are due to meet in Washington later this month.

In late August, Treasury targeted the United Arab Emirates branch of an Egyptian bank over its financial ties to Iran.

On Friday, the department sanctioned Turkey’s 35th-largest bank, according to TheBanks.eu.

Tuesday’s sanctions build on a previous authorization to target entities involved in Iran’s aviation sector, as well as a prior designation against Mahan Air, which has been “really supporting Iran’s terrorist activity for a number of years,” a Treasury official said on a press call Tuesday, speaking on condition of anonymity to preview the new sanctions.

The U.S. is also effectively ending all aviation-related licenses that authorized U.S. firms or other entities to engage with Iran, the official said.

While Iran is widely viewed to be facing a major economic crisis that includes soaring inflation rates and plunging oil export totals, it is unclear how much more pain the new sanctions are expected to inflict.

When CNBC asked on Tuesday’s press call for evidence in the Iranian economy to show the pressure campaign is working, the Treasury official said there is anecdotal evidence and other information that can’t be publicly shared but did not provide specifics.