Oil Jumps Again After US-Iran Clash Shakes Fragile Hormuz Truce

BBC, CNBC, the New York Times contributed to this report.

Oil prices climbed Friday after fresh fighting between the US and Iran in the Strait of Hormuz rattled hopes that a shaky ceasefire was holding together.

Brent crude rose more than 1% to just above $101 a barrel, while US West Texas Intermediate crude pushed toward $96. The rebound came after another volatile week for energy markets, where every headline out of the Gulf seems to send prices swinging in a different direction.

The latest spark came after Washington and Tehran accused each other of launching attacks near the Strait of Hormuz, one of the world’s most important shipping lanes for crude exports. The exchange of fire immediately revived fears that tanker traffic through the region could face further disruption.

Markets had only just started calming down on hopes that the two sides were inching toward some kind of deal to end the conflict.

President Donald Trump tried to cool nerves late Thursday, insisting the ceasefire was still alive despite the confrontation. Speaking to an ABC News reporter, Trump brushed off the strikes as “just a love tap.”

The White House tone, however, did little to settle traders.

Trump later posted on Truth Social that US forces had destroyed Iranian targets involved in the incident, including drones and small boats. He also warned Tehran that more strikes could follow if it refuses to agree to a nuclear deal.

That combination – talk of peace alongside fresh military threats – has left oil markets struggling to figure out what comes next.

For a brief moment earlier in the week, investors had started betting that tensions were easing enough for the Strait of Hormuz to fully reopen to normal commercial traffic. But those expectations faded quickly after reports surfaced that Washington was preparing naval escort operations for cargo vessels moving through the waterway.

Analysts at ANZ described the market action as a “rollercoaster rise,” saying doubts around the proposed US-Iran agreement are keeping traders on edge.

Trump later paused the planned naval escort mission, known as “Operation Freedom,” adding another twist to an already chaotic stretch of diplomacy and military signaling.

Even with the ceasefire technically still in place, energy markets are acting like nobody fully trusts it.

The Strait of Hormuz remains the biggest concern. Roughly a fifth of the world’s oil supply moves through the narrow channel, so even isolated clashes can send crude prices sharply higher. Shipping companies, insurers and refiners are all watching closely for signs the situation could spiral again.

Citi analysts said broader financial markets may eventually stabilize, but warned that the road back to normal is unlikely to be smooth. Oil, in particular, could stay elevated for months if tensions keep flaring up every few days.

For now, traders are stuck parsing military updates, diplomatic leaks and Trump social media posts – often all in the same afternoon.