Oil prices rise after US-Iran exchange of fire in Strait of Hormuz

Oil prices climbed as reports of an exchange of fire between US and Iranian forces around the Strait of Hormuz heightened concerns about disruptions to oil flows through the strategic chokepoint. Market participants moved to price in a higher risk premium amid uncertain passage conditions for tankers.

The flare-up followed a US operation aimed at securing transit for commercial vessels; US military statements said they intercepted Iranian attacks and carried out self-defence strikes while escorting merchant ships. President Donald Trump told reporters that the ceasefire between Washington and Tehran was still holding despite the incidents, even as Iranian outlets reported exchanges of fire near Qeshm Island.

Markets reacted quickly: US crude (WTI) futures moved toward roughly $105 per barrel and Brent traded in the $110–$114 range during volatile sessions, with intraday swings reflecting changing assessments of the ceasefire’s durability and shipping risks. The moves pushed up freight and war-risk insurance costs for vessels operating in the Gulf, adding to immediate supply-cost concerns.

The Strait of Hormuz carries a significant share of global seaborne crude, so any prolonged constraint on traffic has the potential to tighten global supply and lift prices further. Although the US administration sought to reassure markets that offensive operations had not resumed, the episode underlined the fragility of the recent truce and the speed with which localized clashes can translate into global energy market stress.

Analysts say near-term volatility is likely to persist and that outcomes will depend on whether diplomatic channels restore confidence or if military actions escalate. Traders and energy firms are expected to monitor shipping lanes, insurance spreads and official statements closely; a sustained reopening of the strait would relieve immediate pressure, while renewed blockade or attacks on infrastructure would support a higher price baseline.