Escalating U.S.-Iran Conflict Pushes Oil Above $77 as Shipping Halts in Strait of Hormuz

London | EcoPulse24

Oil prices rose during Thursday trading as military tensions between the United States and Iran escalated, amplifying concerns about global energy supplies and the potential for broader disruptions in one of the world's most important oil corridors.

West Texas Intermediate (WTI) crude futures climbed over 3% to trade near $77 per barrel, extending gains recorded since the beginning of the week amid increasing geopolitical risks in the Gulf region.

This uptick followed reports that a U.S. submarine had sunk an Iranian warship off the coast of Sri Lanka, an action described by U.S. Defense Secretary Pete Hegseth as the first such strike against a hostile force since World War II.

The U.S. and Israel-led military campaign against Iran has entered its sixth day, keeping markets on edge over fears that the conflict could broaden or evolve into a prolonged standoff with direct implications for global energy markets.

Meanwhile, the crisis has led to an almost complete halt in commercial shipping through the Strait of Hormuz after Iran's Revolutionary Guard warned it would target any vessel attempting passage. The strait handles about 20% of global oil trade.

To mitigate potential shocks to energy markets, U.S. President Donald Trump announced insurance guarantees and naval escorts for commercial vessels crossing the Arabian Gulf, while Treasury Secretary Scott Besant outlined additional measures aimed at stabilizing regional energy markets.

EcoPulse24 Analysis
The recent spike in oil prices reflects a significant rise in the geopolitical risk premium. Any prolonged disruption in the Strait of Hormuz could trigger a major global supply shock. As the conflict enters its sixth day, investors are closely watching for signs of further escalation or extended shipping restrictions, both of which could push oil prices even higher.