Hedge funds turned the most bullish on Brent crude since May as a fresh spate of fighting between the US and Iran heightened concerns about prolonged disruptions to energy flows through the Strait of Hormuz. Money managers increased their net-bullish positions on the global benchmark by 37,837 to 261,435 in the week ending Sept. 1, weekly ICE Futures Europe data on futures and options show. That’s the highest in just over three months. Meanwhile, net-long bets on US oil rose to the highest since June, data from the Commodity Futures Trading Commission show.

Crude prices have regained ground this week as a US bombing campaign and Iran’s retaliatory strikes on American bases complicate efforts to restore shipping through the world’s most important energy chokepoint. The renewed fighting has also prompted Iran to target vessels transiting the waterway, interrupting a period of relative calm in which traffic through the strait had gradually recovered. The threat of another cycle of military escalation now hangs over the region, after Iran fired salvos at Jordan, Kuwait and Bahrain, while Israel warned it would strike civilian infrastructure if attacked by Tehran.

Refined products, such as diesel, have rallied even more sharply, squeezed by simultaneous wars in the Middle East and Ukraine. Net-bullish bets on the fuel have climbed to their highest since March, while US retail diesel prices hit a record $5.85 a gallon on Thursday. Net-long bets on gasoline surged to 89,263 lots, the highest since December. Seasonally, traders have never been more bullish at this point in the year, as gasoline prices hover at record highs for September.