Oil surges after US launches fresh strikes on Iran amid Strait of Hormuz tensions

Oil prices rose sharply on Thursday after the US military launched fresh strikes on Iran, dashing hopes for a ceasefire and reopening of the Strait of Hormuz. Brent crude futures climbed 1% to $78.8 a barrel in early Asian trade, while US West Texas Intermediate rose 1.01% to $74.26 a barrel. Prices had already surged more than 4% on Wednesday after President Donald Trump declared the interim deal 'over' and threatened further strikes.

What happened

The US Central Command announced strikes aimed at keeping the Strait of Hormuz open, responding to Iranian attacks on commercial shipping. Iran retaliated by striking US sites in Bahrain and Kuwait. The US revoked sanctions relief for Iranian oil sales that had been part of the interim agreement. Source: CNA Maritime authorities raised the threat risk to 'severe' after two tankers were attacked on Tuesday, prompting war underwriters to advise shipping companies to pause voyages through the strait. Source: CNA

Market impact

Analysts warned of outsized effects. 'The market is again being forced to price the risk that renewed attacks on shipping, or a broader breakdown in US-Iran relations, could slow the normalisation of flows through the Strait of Hormuz,' said Saxo Bank. Source: CNBC The strait carries one-fifth of pre-war global oil supplies, making even limited disruption significant. While Brent settled at $78.02 on Wednesday, it later traded above $79. Source: CNA

What's next

Traders remain cautious as the US signals larger strikes, and Iran threatens further retaliation. The renewed hostilities erase recent progress toward reopening the waterway, keeping supply risks elevated.