Oil Holds Gains as Hormuz Risks Return

Crude oil held near $73.5 per barrel on Thursday after rising 4.4% in the previous session, its strongest daily gain since May, as markets reassessed the outlook for Middle East supply following renewed US and Iranian hostilities. The latest escalation, including further US strikes on Iran and retaliatory attacks on American bases in the region, has placed the Strait of Hormuz back at the center of energy market concerns. However, the extent of the disruption to oil flows through the key shipping route remains uncertain. Vessel tracking data showed a decline in Hormuz transits, with most visible activity concentrated along Iran approved routes, while the US backed Omani corridor saw limited movement. Despite the slowdown, traders noted that significant volumes of crude had continued to pass through the strait before the ceasefire, with some shipments only becoming visible days later due to limited tracking signals.

Crude oil slipped below $73 per barrel on Thursday, snapping a two-day rally even after the US military confirmed it had carried out strikes on Iran for a second straight day, intensifying tensions and fueling concerns over energy supplies from the Middle East. The US said the attacks were intended to reduce Iran’s ability to threaten navigation through the Strait of Hormuz, while Tehran targeted US military bases across the region in retaliation. President Donald Trump declared that, in his view, the ceasefire is over and warned of additional military action against Iran, including a new blockade. He also cautioned that oil prices could climb further and said future strikes may target Iran’s key export terminal on Kharg Island. The renewed hostilities have heightened fears that the collapse of the interim US-Iran peace agreement could once again disrupt global oil supplies, with the Strait of Hormuz remaining at the center of the conflict.

Crude oil prices surged as much as 7% at $75.6 a barrel on Wednesday as escalating tensions in the Middle East fueled concerns over further supply disruptions. President Trump said that as far as he is concerned, the ceasefire is over and threatened additional strikes on Iran and a new blockade. Yesterday, the US revoked a waiver that had allowed Iran to sell crude, following attacks on vessels transiting Hormuz. The actions followed a series of recent attacks on vessels transiting the Strait of Hormuz. Tehran also said it had targeted 85 US military sites in Bahrain and Kuwait in response to what it described as US violations of the ceasefire. The renewed conflict raised the prospect of fresh disruptions to global energy supplies by deterring shipowners and regional producers from using the vital waterway. The escalation marks a sharp reversal from earlier expectations of a supply glut, after OPEC+ increased production quotas and Middle Eastern producers moved to ramp up output.