Oil jumps as U.S. fresh strikes on Iran raise worries of extended disruption to energy flows

• U.S. Central Command conducted self-defense strikes against multiple Iranian targets at 5:15 p.m. ET in response to what it called 'unwarranted and continued aggression'
• Iranian state media reported Tehran launched missile and drone attacks against U.S. vessels in the Strait of Hormuz, a critical energy chokepoint
• Rystad Energy notes the oil market is better positioned to absorb disruptions due to record U.S. crude exports and softer Chinese demand, though prices remain vulnerable to sharp swings if conflict escalates

Oil Prices Surge on U.S.-Iran Military Escalation

Market Movement:

Oil prices jumped Thursday following fresh U.S. military strikes on Iran. WTI crude futures for July rose 2.94% to $92.68 per barrel, while Brent crude futures for August gained 2.52% to $95.45 per barrel.

Key Developments:

The U.S. Central Command announced additional "self-defense strikes" against multiple Iranian targets at 5:15 p.m. ET, executed under presidential direction in response to what officials called "Iran's unwarranted and continued aggression." Iranian state media reported retaliatory missile and drone attacks against U.S. vessels in the Strait of Hormuz—a critical chokepoint for global energy flows.

President Donald Trump signaled intentions to intensify military action while simultaneously pressuring Tehran toward diplomatic negotiations.

Market Implications:

The escalating U.S.-Iran conflict raises concerns about prolonged disruptions to energy supplies. However, Rystad Energy offered a measured assessment, noting the oil market is better positioned to absorb shocks than in previous crises due to:

• Record U.S. crude exports
• Softer Chinese demand
• Alternative export routes reducing Strait of Hormuz dependency

Outlook:

Despite these mitigating factors, Rystad's Senior Vice President Jorge Leon warned that prospects for near-term diplomatic resolution have diminished. Oil prices remain vulnerable to sharp volatility as investors monitor whether hostilities will remain contained or escalate into prolonged conflict.

Bottom Line:

The energy sector faces heightened geopolitical risk premium, with traders weighing improved market fundamentals against the threat of extended supply disruptions from one of the world's key oil-producing regions.