In an aerial view, a Valero refinery is seen on May 5, 2026 in Corpus Christi, Texas.
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Oil resumed its rally Friday after the U.S. and Iran exchanged fire in the Strait of Hormuz, fanning fears that the fragile ceasefire between the two countries was unraveling and threatening continued disruption to shipping via one of the world’s most critical oil route.
International benchmark Brent crude futures for July delivery rose 2.26% to $102.32 per barrel. U.S. West Texas Intermediate futures for June delivery added 2.06% $96.76.
Washington and Tehran accused each other of initiating attacks in the Strait of Hormuz, further straining a ceasefire agreement already weakened by repeated allegations of violations. The flare-up came as Iran is reportedly reviewing a U.S. proposal to end the war.
U.S. President Donald Trump, in a call with an ABC News reporter later Thursday, insisted that the ceasefire remains in effect, saying the strikes were “just a love tap.”
Oil prices since the start of the year
In a Truth Social post, Trump said U.S. forces had wiped out the Iranian targets involved in the clash, including small boats and drones. He also warned that Iran would face further military strikes if it failed to agree to a nuclear deal.
Market optimism over a possible reopening of the Strait of Hormuz faded after reports emerged that Washington was preparing to resume naval operations escorting commercial vessels through the waterway, ANZ wrote in a note, adding that oil prices suffered a “rollercoaster rise” as doubts emerged over U.S.-Iran peace negotiations.
Trump later paused “Operation Freedom,” the U.S. naval mission aimed at escorting commercial vessels through the Strait of Hormuz.
“The risk of a proposed U.S. peace deal breaking down will likely keep oil markets volatile,” said ANZ Research’s experts.
Citi analysts said they expect broader financial markets to stabilize despite recent volatility linked to the Middle East, though the bank warned that the path toward normalization is unlikely to be smooth and could keep oil prices elevated in the months ahead.
— CNBC’s Kevin Breuninger contributed to this report.