Oil prices moved higher on Thursday after fresh military action between the United States and Iran undermined confidence in a near-term diplomatic resolution and renewed concerns over disruptions to energy flows through the Strait of Hormuz.
By 05:51 ET (09:51 GMT), Brent crude futures had climbed 2.3% to $96.42 per barrel, while U.S. West Texas Intermediate crude futures gained 2.2% to $90.52 per barrel.
New Attacks Intensify Tensions Across the Gulf
Iran’s Islamic Revolutionary Guard Corps said it had launched strikes against a U.S. airbase in Kuwait in retaliation for earlier American attacks on the Iranian port city of Bandar Abbas.
Separately, Kuwaiti officials confirmed that the country’s air defense systems were responding to incoming missile and drone attacks, although authorities did not identify where the strikes originated.
The latest exchange marked a renewed escalation in hostilities between Washington and Tehran despite repeated U.S. claims that a fragile ceasefire remained intact. Earlier this week, the United States characterized its strikes on Iranian targets as defensive measures.
Trump Remarks Reduce Optimism Around Peace Negotiations
Thursday’s developments came after U.S. President Donald Trump rejected reports suggesting that Iran could reopen commercial shipping routes through the Strait of Hormuz within a month.
Trump later signaled that he remained unconvinced by current proposals aimed at ending the conflict, which has now stretched into its third month.
Oil prices had weakened on Wednesday and were also heading for notable weekly losses amid growing market expectations that a diplomatic breakthrough between the U.S. and Iran was close. However, Trump’s latest comments suggested investors may have moved too quickly in pricing in a peace agreement.
Although U.S. officials had offered encouraging remarks regarding negotiations with Tehran over the past week, major disagreements persisted over Iran’s nuclear programme and future arrangements surrounding the Strait of Hormuz.
Shipping Disruptions Continue to Affect Energy Markets
Recent shipping data indicated that some vessels had resumed passing through the Strait of Hormuz, although overall traffic volumes remained significantly below pre-conflict levels.
Ongoing disruption around the strategic passage continues to impact roughly 20% of global oil supplies, leaving energy markets highly sensitive to any further escalation.
Trump also dismissed proposals for Iran and Oman to jointly oversee the waterway, arguing that such an important global shipping route should not fall under the control of any single nation.
Analysts Warn of Increasing Pressure on the Oil Industry
Analysts at Yardeni Research cautioned that both Iran and the wider global oil market were approaching increasingly vulnerable conditions.
“If an agreement is reached, it may be because the oil market is approaching a dangerous stage for both Iran and the global oil industry. Iran faces a lack of oil storage that could force it to shut down oil production, and the global oil industry is running on such slim supplies that it could start affecting pipelines and other oil infrastructure,” analysts at Yardeni Research said in a note to clients.
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