Oil prices climbed on Thursday after fresh US strikes in Iran reignited fears of disruptions to commercial shipping through the Strait of Hormuz.
Brent crude, the global benchmark, surged more than 3% to $97.29 a barrel, while US West Texas Intermediate (WTI) crude jumped 3.42% to $91.71 a barrel.
Iran’s Revolutionary Guards said that they struck a US airbase at around 4:50 a.m. local time, according to the country’s semi-official Tasnim news agency, though the IRGC did not disclose the location of the base.
US officials said Central Command forces shot down four Iranian one-way attack drones that posed a threat near the Strait of Hormuz. The US military also struck an Iranian ground control station in Bandar Abbas that was preparing to launch a fifth drone.
The latest escalation comes days after the US military carried out what it described as “self-defense strikes” in southern Iran, targeting vessels allegedly attempting to deploy mines along with missile launch sites. US Central Command said the operation was aimed at protecting American troops and commercial shipping routes.
Iran’s Islamic Revolutionary Guard Corps later said it would respond to ceasefire violations after detecting and engaging US drones and an F-35 fighter jet that had entered Iranian airspace. A US official said the latest strikes targeted an Iranian military facility believed to pose a threat to American forces and maritime traffic moving through the strait.
Meanwhile, President Donald Trump said Iran was “negotiating on fumes” and added that the upcoming US midterm elections would not pressure him into rushing a deal to end the nearly three-month-old conflict.
In a note released late Wednesday, Citi said oil markets were stabilising as investors gradually moved away from pricing in severe supply disruption risks amid signs of progress in negotiations between Washington and Tehran.
However, the bank said uncertainty around the timing of any agreement continued to keep central banks cautious, as policymakers assessed the inflationary impact of elevated energy prices.
Citi added that the sustained rise in crude prices was beginning to feed into broader inflation pressures through what it described as “second round effects”, pushing some central banks toward a more hawkish stance.
Swiss investment bank UBS said on Friday that pressure on the global oil market was intensifying as inventories continued to shrink amid disruptions to shipments through the Strait of Hormuz. The bank noted that global oil inventories declined by a combined 246 million barrels in March and April, while cumulative production losses could exceed 1 billion barrels by the end of May.
Analysts said that even if a deal is reached, shipping activity through the strait may take several months to normalise, while damaged energy infrastructure could take even longer to recover fully.
Earlier this month, Saudi Aramco CEO Amin Nasser warned that disruptions in Hormuz could delay stability in global oil markets until 2027, with nearly 100 million barrels of oil supply per week potentially impacted. Saudi Aramco is the world’s largest oil producer.
Morgan Stanley described the current oil market as being in “a race against time”, saying the factors that have so far prevented a sharper rise in crude prices may weaken if the Strait of Hormuz remains shut through June.
The brokerage said higher US crude exports and softer demand from China had helped absorb part of the supply shock. However, it cautioned that an extended closure of Hormuz could tighten global supplies again if disruptions continue beyond what the US and China can comfortably offset.
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