Oil prices rose markedly in early trading on Wednesday after the U.S. military announced new strikes against Iran and the U.S. reinstated sanctions on Iranian oil in response to a series of attacks on ships in the Strait of Hormuz.
By 19:04 ET (23:04 GMT), West Texas Intermediate crude futures were up 2.9% at $72.45 a barrel. Brent crude had not begun trading at that time, having closed the prior session up 5.5% at $75.94 a barrel on Tuesday.
Military action and official statements
U.S. Central Command (Centcom) said it had initiated a series of strikes against Iran, characterizing the operation as intended to impose "heavy costs" for Tehran's attacks on commercial shipping. In a statement, Centcom said: "The U.S. strikes are in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz," and it accused Iran of violating the ceasefire.
Reports in the same period indicated Iran had carried out attacks on vessels attempting to cross the Strait of Hormuz earlier in the week, a development that elevated tensions with the United States and stoked further uncertainty over the security of this strategic waterway.
Market implications and supply concerns
The return of hostilities and fresh signs of shipping trouble in the Strait of Hormuz revived worries about potential supply disruptions from the Middle East. Those concerns were compounded by the U.S. decision to withdraw a concession that had allowed Iran to sell oil internationally - a policy reversal that market participants see as capable of tightening global oil markets in the weeks ahead.
Earlier in the summer, crude prices had fallen back to pre-war levels in June after the United States and Iran reached a framework peace deal, which had also coincided with improved ship flows through the Strait of Hormuz. The latest escalation threatens to undermine that agreement, and the article notes that prospects for further peace talks between the two countries now appear uncertain.
Offsetting factors and remaining dynamics
Signs of additional supply surfaced elsewhere, however, when OPEC and its allies agreed at a weekend meeting to raise production. Despite that planned increase, renewed Middle East supply concerns dominated market sentiment on Wednesday.
No new figures or timelines were provided on the likely scale of any disruption or on how long heightened shipping risk might persist. The situation remained fluid as markets reacted to both the military developments and policy shifts affecting Iranian oil sales.
Summary
Fresh U.S. strikes on Iran and the reimposition of oil sanctions lifted oil prices, driven by concerns about shipping security in the Strait of Hormuz and the potential for tighter global supply, even as OPEC+ production increases offered an offsetting supply signal.