Oil surges as Iran halts tankers in Strait of Hormuz

Global oil prices jumped more than 4% on Wednesday after a rapid sequence of military escalations between the United States and Iran reignited fears of supply disruptions through the Strait of Hormuz. Brent crude rose nearly 5% to around $88 a barrel while West Texas Intermediate topped $83, snapping a three-day losing streak as the conflict's latest chapter unfolded across multiple fronts.reuters

Military Strikes and Missile Attacks

The U.S. military said on Tuesday it conducted joint strikes with Saudi Arabia's armed forces in Iraq against militant groups aligned with Iran. Hours later, Iran launched multiple ballistic missiles toward a U.S. base in Jordan in what U.S. Central Command described as an "attempted surprise attack". CENTCOM said all Iranian missiles were successfully intercepted.reuters+2

The missile strike marked Iran's first ballistic attack against a U.S. base in the region since President Trump paused strikes against Iran last week to give diplomacy another chance, according to Axios. The resumption of hostilities came just days after talks between Iran and Oman over management of the Strait of Hormuz were described as "fruitful" by Iran's foreign ministry.axios+1

Hormuz Standoff Deepens

Compounding supply fears, Iran rejected an Omani proposal for joint regional oversight of the strait. Under the plan, backed by Gulf states, the two countries would split control in a 50-50 arrangement. Tehran countered by demanding majority control over both inbound and outbound shipping lanes.aljazeera+2

The Islamic Revolutionary Guard Corps added to market anxiety on Wednesday by announcing it had struck and halted three oil tankers in the Strait of Hormuz that it said were navigating an "illegal route". The IRGC said it continues to maintain full operational control over the strategic waterway, through which roughly a fifth of global oil supply transits.wanaen+1

Supply Fundamentals Add Pressure

Beyond geopolitics, U.S. crude inventory data provided further support for prices. The American Petroleum Institute reported that crude stocks fell by about 3.3 million barrels in the week ending July 24, against expectations of a 2.5 million barrel build. CNBC ↗ 0.58% reported oil prices had jumped more than 6% at their session highs after President Trump said the U.S. would "hit Iran hard."reuters+1

The combination of failing diplomacy, renewed military strikes, and physical disruptions to tanker traffic has left energy markets facing their most volatile stretch since fighting over the Strait of Hormuz intensified earlier this month.cbsnews+1