Oil Rises as US Reimposes Blockade and Strikes Iranian Targets

Oil prices surged on Wednesday after the United States reimposed a naval blockade on Iranian ports and launched fresh strikes, escalating hostilities in the Strait of Hormuz. Brent crude rose 1.72% to $86.19 a barrel, while West Texas Intermediate gained 1.4% to $80.40 Source: CNA.

Renewed hostilities

The U.S. Central Command confirmed another wave of strikes targeting Iranian military assets near the Strait, involving fighter aircraft, drones, and naval vessels over seven hours Source: CNBC. The operation began as U.S. forces resumed a naval blockade on vessels traveling to and from Iranian ports. Iran responded with retaliatory drone attacks on U.S. positions at Jordan's Azraq base, though the Pentagon has not commented Source: CNA. The Islamic Revolutionary Guard Corps also claimed attacks on weapons facilities in Bahrain and Kuwait, unverified by Reuters.

Market reaction

Analysts noted the risk premium remains high. "The hostilities set the conflict back on an escalatory trajectory," said Saul Kavonic, senior energy analyst at Mst Marquee Source: CNBC. He warned oil could retest $100 if intensity persists for weeks. Tim Waterer of KCM Trade said Brent could stay at $75–$80 if diplomatic efforts reopen the Strait, but "the chances of oil moving back toward $100 in the reasonably near term are still meaningful if hostilities intensify" Source: CNA. The Strait of Hormuz, through which a fifth of global oil transited before the war, remains effectively closed.