Oil rises 3% after new U.S. and Iran strikes

Highlights

WTI rose to $91.51 and Brent climbed to $97.14, with both benchmarks gaining about 3%.
The U.S. said it shot down Iranian drones and struck a target in the Bandar Abbas area.
The Iranian Revolutionary Guard struck a U.S. air base, increasing the risk that the cease-fire could collapse.
New U.S. sanctions target an Iranian entity linked to control over passage through Hormuz.

The cease-fire comes under new pressure

According to Bloomberg, the U.S. carried out airstrikes on an Iranian military site and expanded sanctions pressure on Tehran, saying it was trying to prevent Iran from earning revenue from vessels passing through the Strait of Hormuz. Washington described the strikes as defensive and stressed that it still intends to comply with the cease-fire that took effect last month.

U.S. Central Command forces shot down four Iranian drones that were headed toward a commercial vessel and also struck another drone in the Bandar Abbas area, near the strait. On Thursday, tensions rose further when the Iranian Revolutionary Guard struck a U.S. air base after the drone incident near Hormuz.

The developments came just hours after President Donald Trump rejected reports that Washington was close to a compromise agreement with Tehran. Earlier, he said no country should control the vital waterway. Trump said the Strait of Hormuz is international waters, should remain open to all, and that the U.S. would monitor freedom of navigation.

Hormuz remains the main source of risk

The U.S. Treasury Department imposed measures against Iran’s Persian Gulf administration. Washington accused it of trying to turn control over transit through Hormuz into a source of revenue by demanding payments from vessels for safe passage.

Iran had previously expanded its claimed jurisdiction in the area around the strait and introduced new rules for ships. According to the U.S. side, in some cases the demands reached as much as $2 million per passage. For the market, this is especially sensitive: about one-fifth of global oil and liquefied natural gas supplies normally passes through Hormuz.

At the same time, concern spread beyond the U.S.-Iran confrontation. Kuwait reported the interception of hostile missiles and drones, warning that any explosions heard were the result of air defense systems engaging hostile targets. The Israeli military said it had struck Hezbollah infrastructure near Tyre in southern Lebanon, while sirens sounded in northern Israel because of hostile aircraft activity.

The oil market prices in the cost of conflict again

The sharp rise in oil showed how quickly investors reassess risks when diplomatic signals give way to military headlines. WTI rose by $2.87, or 3.24%, to $91.51 a barrel. Brent gained $2.85, or 3.02%, to reach $97.14.

For the global economy, this creates a new inflation risk. If passage through Hormuz remains restricted, higher oil prices could quickly feed into gasoline, freight, air travel, and industrial goods. The main question for markets now is not only whether a deal can be reached, but whether the U.S. and Iran can preserve even the basic framework of the cease-fire as new attacks continue.

It was earlier reported that markets bet on Iran de-escalation as AI stocks extend rally.

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