Oil Prices Surge After US Strikes on Iran

Oil prices jumped over one percent Thursday after new U.S. strikes on Iran sparked fresh Middle East worries. However, the escalation hurt hopes for a lasting ceasefire. Furthermore, it raised fears of disruptions in the Strait of Hormuz. Consequently, energy markets, global shipping, and oil-importing nations will likely feel the impact.

Brent crude futures rose 86 cents, or 1.1 percent, to $78.88 per barrel. Meanwhile, U.S. West Texas Intermediate crude gained 85 cents, or 1.2 percent, to $74.37 per barrel. In addition, both benchmarks had already surged after the United States struck nearly 90 Iranian military targets along the coast.

Read more: US sanctions leave millions of Iranian oil barrels stranded at sea

According to U.S. Central Command, the operation hit air defense systems, coastal surveillance assets, missile and drone storage sites, and naval infrastructure. Furthermore, Washington stated the strikes aimed to keep the Strait of Hormuz open for global shipping. However, analysts warned the renewed military action shattered confidence in an already fragile ceasefire.

Strait of Hormuz Concerns

Moreover, the latest escalation also hit maritime trade through the Strait of Hormuz, which carries about one-fifth of global oil supplies. Consequently, shipping firms and insurers have grown more cautious as security risks rise. Therefore, Iran has previously threatened to disrupt traffic through the vital waterway, making energy markets very sensitive to new developments.

Read more: US Reimposes Restrictions on Iran\’s Oil Sales After Maritime Tensions

Market Outlook

Furthermore, market analysts expect oil prices to stay volatile as geopolitical tensions persist. In addition, they say prolonged uncertainty in the Middle East could keep a risk premium in crude prices despite wider economic pressures. Meanwhile, investors are closely watching military moves and diplomatic talks that could set the next course for global energy markets.