Global crude prices ticked upward on Thursday after the U.S. launched another round of strikes on Iran, a development that dimmed expectations for an immediate end to hostilities and complicated the outlook for traffic through the Strait of Hormuz - a key transit route for a significant share of pre-war global oil flows.
By 0054 GMT, Brent crude futures were trading 78 cents higher, at $78.80 a barrel. U.S. West Texas Intermediate (WTI) futures rose 74 cents to $74.26 a barrel. Both benchmarks had also climbed by more than a dollar in post-settlement trade on Wednesday, following the start of fresh U.S. military action.
Earlier moves higher came after U.S. President Donald Trump warned of additional strikes against Iran and said such action could come as soon as Wednesday night. The U.S. military has said the latest strikes were aimed at keeping the Strait of Hormuz open to commercial shipping. In a statement reported by U.S. officials, the president declared that an interim agreement to end the war was "over".
Market participants reacted to the strikes and related statements on both the security and commercial fronts. IG analyst Tony Sycamore noted that "the rush of oil that passed through the strait in recent weeks is over for now, with shipowners expected to take a more cautious stance." That caution is already being reflected in shipping behavior and insurance assessments.
The U.S. said its actions were taken in response to an assault on Tuesday that targeted three tankers transiting the Strait of Hormuz. According to U.S. accounts, the strikes struck targets along Iran's southern coast, rattling several cities and producing localized power outages in some areas.
Iran, for its part, said on Wednesday that it had attacked U.S. military sites in Bahrain and Kuwait in response to earlier U.S. strikes on infrastructure. The exchange of strikes has prompted reactions in the insurance market: several war underwriters have recommended that shipping companies pause voyages through the Strait of Hormuz, while others are reassessing policy terms after Iran renewed attacks on vessels, according to insurance industry sources.
These developments have reverberated across energy and maritime markets as traders, shipowners and insurers weigh the immediate implications for cargo routing, premiums and the availability of vessels to service routes that pass through the Gulf and the strait.
Key market responses include higher crude futures, increased caution among shipowners, and insurance firms reviewing coverage for voyages through the Strait of Hormuz.