Oil prices surge over 4% as US-Iran fighting resumes

Oil prices jumped more than 4% today (July 13) after the United States and Iran launched fresh military strikes, raising new fears over energy shipments through the Strait of Hormuz.

Brent crude rose by $3.10 to $79.11 a barrel, while US West Texas Intermediate crude increased by $2.95 to $74.36 a barrel by 3:25 AM GMT.

The US military said it struck dozens of targets across Iran yesterday (July 12). Iran’s Revolutionary Guards said today that they had attacked US military bases in Kuwait and Bahrain.

US President Donald Trump said yesterday that the Strait of Hormuz remained open to commercial ships. However, Iran had earlier announced that it had closed the waterway after striking a vessel that allegedly used an unauthorised route.

Before the war began at the end of February, around 20% of the world’s oil and liquefied natural gas passed through the strait. Only six vessels crossed it yesterday, the lowest daily number recorded in five weeks.

The renewed fighting has also raised doubts about an interim agreement signed by the US and Iran last month to reopen the strait and work towards ending the war.

Global oil supplies increased by 4.1 million barrels per day in June following the agreement, but remained 9.4 million barrels per day below pre-war levels, according to the International Energy Agency.

Market analysts said the oil price increase suggested traders currently viewed the attacks as a serious escalation within a fragile truce, rather than a complete collapse of the ceasefire.

However, the future of the agreement remains uncertain.