Oil prices surged as geopolitical tensions escalated in the Middle East, with Iran’s Revolutionary Guard declaring the Strait of Hormuz closed and reporting attacks on vessels in the area. The US responded by launching new strikes on Iranian military assets inside Iran. Brent crude prices climbed toward USD 95 per barrel on these developments, reflecting heightened concerns over potential disruptions to a critical global oil transit route [1].
According to Danske Bank, Iran threatened to target any vessel attempting to transit the Strait, and reported that two ships were fired upon. However, US Central Command stated that commercial traffic 'was continuing to transit in and out of the Strait,' indicating some discrepancy in the immediate impact on shipping [1].
Further escalating the situation, Iran claimed to have launched drone and missile attacks on multiple US bases in Kuwait, Bahrain, and Jordan. In response, former President Trump ordered new strikes against 'multiple' targets in Iran overnight, stating in an interview that attacks would continue if a deal was not reached the same day. Iranian state-run TV asserted that the Strait of Hormuz had been completely closed in retaliation [1].
Despite the escalation, the price action overnight was described as relatively modest, though Brent crude continued to move higher, signaling ongoing market sensitivity to developments in the region [1].
CONCLUSION
The closure of the Strait of Hormuz and reciprocal military actions between Iran and the US have driven Brent crude prices close to $95 per barrel. While the market reaction has been somewhat restrained so far, the situation remains fluid and could lead to further volatility depending on future developments.