Oil prices surged on Friday following an exchange of hostilities between the United States and Iran in the Strait of Hormuz. The confrontation escalated concerns that the already fragile ceasefire between the two nations is deteriorating, thereby threatening ongoing disruptions to maritime traffic through one of the world’s most strategic oil transit corridors. International benchmark Brent crude futures for July delivery rose by 2.26 percent to reach USD 102.32 per barrel, while United States West Texas Intermediate futures for June delivery increased by 2.06 percent to USD 96.76 per barrel.
Washington and Tehran have exchanged accusations regarding the initiation of the attacks in the Strait of Hormuz, further straining a ceasefire agreement that had already been weakened by repeated allegations of violations. This escalation occurs as Iran is reportedly reviewing a United States proposal aimed at ending the conflict.
Despite the heightened tensions, President Donald Trump insisted during a telephone interview late Thursday that the ceasefire remains intact, characterizing the strikes as merely “a love tap.” In a subsequent post on Truth Social, President Trump stated that United States forces had eliminated the Iranian assets involved in the clash, including small boats and drones, and warned that Iran would face additional military action should it fail to reach an agreement on a nuclear deal
Outlook on Oil Market Volatility
Market optimism regarding the potential reopening of the Strait of Hormuz diminished following reports that Washington was preparing to resume naval operations to escort commercial vessels through the waterway. Furthermore, oil prices experienced a rollercoaster rise as doubts emerged over the prospects of United States-Iran peace negotiations.
President Trump later paused “Operation Freedom,” the naval mission, specifically designed to escort commercial shipping through the strait. Analysts noted that the risk of a proposed United States peace deal collapsing will likely keep oil markets volatile. They added that, despite recent volatility linked to events in the Middle East, they anticipate broader financial markets will stabilize. However, they cautioned that the path toward normalization is unlikely to be smooth and could sustain elevated oil prices in the months ahead.
