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

Oil prices surged more than 3 percent on Thursday after the United States carried out fresh strikes inside Iran and Tehran responded by targeting an American airbase, reviving long-standing concerns about potential disruptions to global energy supplies through the Strait of Hormuz. Brent crude climbed to $97.16 a barrel while West Texas Intermediate reached $91.43, reflecting investor anxiety over the latest round of military exchanges between Washington and Tehran.

The American strikes hit a military site that US officials described as posing a threat to American forces and commercial shipping lanes. Iranian state media reported that Revolutionary Guard forces struck back at a US airbase shortly afterward, though the exact location was not disclosed. The sequence followed days of mixed signals from the Trump administration, which has publicly stated a preference for negotiated diplomacy even as it authorized additional military action.

Traders had briefly welcomed comments from Secretary of State Marco Rubio suggesting talks with Iran were advancing, yet those gains evaporated once the new strikes became public. President Trump separately warned that any agreement would not permit Iran to exert control over the Strait of Hormuz, a vital chokepoint for roughly one-fifth of global oil shipments. Iranian officials have indicated they would restore commercial traffic through the waterway to pre-conflict levels within a month of reaching a deal, but the latest violence has cast doubt on whether such timelines remain realistic.

The price jump comes against a backdrop of already elevated energy costs that analysts warn could feed into broader inflation. Citigroup noted in a recent client note that central banks are monitoring the situation closely, concerned that sustained higher crude prices may produce secondary effects on consumer costs and force more hawkish monetary policy in several economies. Equity markets reflected the unease, with S&P 500 futures slipping 0.2 percent in early trading and Nasdaq 100 futures falling 0.3 percent.

The renewed confrontation underscores how quickly diplomatic openings can be overshadowed by military moves. While the administration has emphasized that it seeks a negotiated path, the decision to launch additional strikes has been interpreted by many observers as an escalation that risks drawing in other regional actors and further destabilizing an already fragile energy market. Shipping companies and energy firms are once again reviewing contingency plans for the Strait of Hormuz, where even the threat of closure can send prices sharply higher.

Market participants now await the next inflation data release for clues on whether energy volatility will translate into lasting economic pressure. For now, the immediate effect has been a clear reminder that geopolitical friction in the Gulf continues to exert powerful influence over both commodity markets and investor sentiment worldwide.