Oil prices climbed Thursday as renewed U.S.-Iran hostilities raised fresh concern over shipping through the Strait of Hormuz, a vital energy route.
Oil prices climbed Thursday after Iran said it had targeted an American airbase following fresh U.S. strikes in southern Iran, reviving fears that fighting could further disrupt shipping through the Strait of Hormuz.
Market snapshots showed crude rising sharply, though reported figures varied by time and outlet. CNBC reported Brent crude up about 2% at $96.28 a barrel by 8:42 a.m. ET, with West Texas Intermediate also about 2% higher at $90.75. The BBC reported a larger move, with Brent up 3.75% at $97.83 and U.S.-traded crude 4% higher at $92.22.
The immediate concern for energy markets is the Strait of Hormuz, the narrow shipping channel through which about one-fifth of the world’s oil and liquefied natural gas normally passes. The waterway has been at the center of the U.S.-Iran conflict, with commercial traffic choked and thousands of tanker ships reported stranded as negotiations continue.
Iran’s Islamic Revolutionary Guard Corps said it targeted a U.S. airbase early Thursday, but did not identify the base. Kuwait, which hosts a U.S. base, said it had intercepted hostile missile and drone threats, while the U.S. military said Iran launched a ballistic missile toward Kuwait that was successfully intercepted by Kuwaiti forces.
U.S. Central Command called the Iranian attack on Kuwait an “egregious ceasefire violation” and said Iranian forces had also launched one-way attack drones that posed a threat in and near the Strait of Hormuz. Reports differed on the precise number of drones involved: one BBC account cited Centcom saying U.S. forces shot down four drones, while another said five drones were intercepted and a sixth launched from Bandar Abbas was prevented.
The U.S. strikes targeted a military site in Bandar Abbas, a strategic port city in southern Iran. Washington has described its recent attacks as self-defense, saying they were meant to protect U.S. troops and commercial shipping. Iran condemned the strikes as a ceasefire violation and said it would take measures to defend its sovereignty.
The renewed hostilities came during a fragile ceasefire and protracted talks aimed at ending a three-month conflict. President Donald Trump said Wednesday the U.S. was “not satisfied” with Iran’s position, while Secretary of State Marco Rubio said talks had made some progress and that Trump preferred diplomacy.
Markets had eased earlier in the week on expectations that a deal could reopen the Strait of Hormuz to more normal traffic. Iranian state television reported that a draft memorandum with the U.S. would reopen the strait to prewar commercial shipping levels under Iranian and Omani management, but the White House dismissed that account as a “complete fabrication.” Trump said no nation would control shipping through the strait.
For now, the oil market is reacting less to a confirmed supply loss than to the risk that the ceasefire could unravel and further restrict one of the world’s most important energy routes. The next test is whether Washington and Tehran keep talking after the latest exchange, or whether more strikes pull the region deeper into the conflict.
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