Oil Prices Rise As U.S.-Iran Tensions Escalate Over Strait Of Hormuz

Oil prices rose on Thursday following an escalation in hostilities between the United States and Iran, but later pared gains as traders assessed the actual impact on global oil supplies, according to Reuters.

Tehran declared the Strait of Hormuz closed after the United States launched additional strikes against Iran, while President Donald Trump vowed further attacks if no peace agreement is reached.

Brent crude futures rose 8 cents, or 0.09%, to $93.18 a barrel by 0702 GMT, while U.S. West Texas Intermediate (WTI) crude gained 25 cents, or 0.28%, to $90.28 a barrel. Both benchmarks had risen by more than $2 earlier in the session.

Iran’s joint military command announced the closure of the Strait of Hormuz to oil tankers and commercial vessels, warning that any ship attempting to pass through the waterway would be targeted.

“It once again suggests a deal is still some way off and that energy flows from the Persian Gulf will remain heavily constrained,” ING analysts said in a note to clients, adding that the renewed escalation in fighting had prompted oil prices to rally in early trading.

“However, the rally was not fully sustained as the market has not yet seen an actual disruption in oil shipments through the area,” said Linh Tran, a market analyst at XS.com.

On Wednesday, the U.S. military said on X that commercial vessels continued to transit in and out of the Strait of Hormuz.

It also stated that no U.S. warships had been struck in the Strait after Iranian state media reported that U.S. vessels near the waterway had been targeted by missiles and drones.

U.S. forces began launching additional strikes against multiple targets in Iran at 5:15 p.m. EDT (2115 GMT), marking the latest escalation in a series of attacks that threaten to reignite a full-scale conflict. The fighting had paused in early April when both sides agreed to a fragile ceasefire.

Trump told Fox News reporter Trey Yingst on Wednesday evening that the strikes would end shortly, but warned that he would launch further attacks if Iran’s leaders failed to immediately sign an agreement with the United States.