Oil surges 3% as US-Iran strikes revive Hormuz supply fears

Oil futures advanced sharply Thursday as fresh American military strikes in Iran and reported Iranian responses raised the prospect of interference with tanker traffic through the Strait of Hormuz. Brent crude gained roughly 3 percent to $97.16 a barrel, while West Texas Intermediate rose a similar amount to $91.43. The moves followed a U.S. official's account that American forces hit an Iranian military site viewed as a threat to shipping lanes and U.S. personnel, and intercepted several drones. Iran's Revolutionary Guard later stated it had targeted a U.S. airbase, according to Iranian media.

Market participants have long treated the narrow waterway between Iran and Oman as a critical choke point. Roughly one-fifth of global oil consumption moves through it each day. Any credible threat of closure or delay therefore lifts prices quickly, as buyers bid for available supplies elsewhere. The latest round of exchanges comes after earlier comments from U.S. officials that diplomatic talks had shown limited progress, though President Trump stated he would not accept Iranian control of the strait as part of any settlement.

Equity futures reflected the higher energy costs. Contracts on the S&P 500 slipped about 0.2 percent in early trading, while Nasdaq 100 futures fell near 0.3 percent. Traders cited both the oil rebound and the scheduled release of fresh inflation data as reasons for caution. Higher crude prices feed directly into transportation and production expenses, an effect that tends to appear in subsequent price indexes even if headline measures remain contained for a time.

Analysts at Citi noted that markets had begun to price out extreme disruption scenarios in recent sessions, yet they warned that uncertainty over any final agreement keeps policy makers watchful. Central banks already face pressure from energy-driven price increases that can spread into wages and other costs. Prolonged elevation in oil benchmarks therefore complicates efforts to bring broader inflation measures back to target levels without tighter credit conditions.

The pattern is familiar. Government decisions to project force or to restrict access to sea lanes alter the supply outlook for a globally traded commodity. Those changes are then registered in futures markets, where participants adjust inventories and hedging strategies. The resulting price signal reaches refiners, shippers, and ultimately households through fuel and goods costs. In this instance, the sequence began with strikes on sites linked to potential Hormuz interference and produced an immediate upward adjustment in crude contracts.

Wednesday had seen a partial reversal when Secretary of State Marco Rubio indicated that negotiations retained priority. Oil prices eased that day, allowing the Dow Jones Industrial Average to set a fresh closing high. The subsequent reversal illustrates how quickly sentiment can shift when military activity resumes. Iranian state media had previously signaled willingness to restore pre-conflict traffic levels within a month of any deal, but that commitment remains untested against the latest developments.

Investors now await the inflation print for further clues on whether energy pass-through effects have accelerated. The data will inform assessments of how long higher oil benchmarks may influence monetary policy settings. In the meantime, the price action in crude continues to register the costs associated with uncertainty over control of a key transit route.