West Texas Intermediate (WTI) oil prices extended gains for the second consecutive day, trading around $90.70 per barrel during Asian hours on Thursday, as the United States continued military strikes against Iran, fueling concerns of a prolonged conflict that could destabilize global energy markets [1]. U.S. crude oil futures for July rose 2.94% to $92.68 per barrel, while Brent futures for August delivery climbed 2.52% to $95.45 per barrel [2]. The escalation began after an American helicopter was shot down, prompting retaliatory Iranian attacks on U.S. military facilities in Bahrain, Jordan, and Kuwait [1]. Iranian state media reported missile and drone attacks against U.S. vessels in the Strait of Hormuz [2].
President Donald Trump warned that the U.S. would strike Iran "very hard" if an interim peace deal is not finalized, accusing Tehran of intentionally stalling negotiations [1][2]. The U.S. Central Command confirmed that American forces launched additional self-defense strikes at 5:15 p.m. ET against multiple targets in Iran, citing Iran's "unwarranted and continued aggression" [2]. Amid the tension, President Trump revealed that the U.S. military secretly escorted over 100 million barrels of oil out of the volatile Strait of Hormuz, claiming this operation prevented crude prices from skyrocketing to $250 a barrel [1].
The conflict has had a direct impact on U.S. crude inventories, with the Energy Information Administration reporting a 7.2 million barrel drop last week, far exceeding the 4-million-barrel draw projected by analysts in a Reuters poll [1]. This has reduced the Strategic Petroleum Reserve to its lowest levels since August 2023. In response, the U.S. Department of Energy announced plans to loan up to 40 million barrels of crude oil from the reserve to energy companies in an effort to curb rising fuel costs [1].
Despite the escalation, Rystad Energy noted that the oil market is better-positioned to absorb disruptions than in past crises, citing record U.S. crude exports, softer Chinese demand, and alternative export routes that reduce reliance on the Strait of Hormuz [2]. However, Jorge Leon, senior vice president at Rystad Energy, warned that the chances of a near-term diplomatic breakthrough have diminished, leaving oil prices vulnerable to sharp swings as investors assess whether the latest hostilities will remain contained or evolve into a more prolonged conflict [2].
CONCLUSION
The latest U.S. strikes on Iran have driven oil prices sharply higher, with both WTI and Brent futures posting significant gains amid fears of extended disruption to energy flows. While the market is currently better equipped to handle supply shocks, analysts warn that the lack of diplomatic progress leaves prices exposed to further volatility. The situation remains fluid, with ongoing military actions and depleted U.S. reserves adding to uncertainty in global energy markets.