Oil prices spiked in early Asian trade Thursday after reports of fresh U.S. strikes on Iranian military targets reignited fears of further escalation in the region. West Texas Intermediate crude rose 2.06% to $90.51 per barrel, while Brent crude climbed 2.17% to $96.34, according to market data. The gains reversed some of the week's earlier losses, when both benchmarks had fallen more than 7% on optimism that peace talks could restore traffic through the Strait of Hormuz.
The price jump underscores the fragility of supply-side expectations in a market still adjusting to sanctions and disrupted shipping lanes. The Strait of Hormuz, a chokepoint through which roughly one-fifth of global oil passes, remains a central risk factor: any extended closure would remove millions of barrels per day from the global balance. Traders had been pricing in a potential reopening after recent diplomatic signals, but the new strikes have shifted sentiment sharply toward caution.
The U.S. military action targets Iranian military infrastructure, according to reports, though specific assets struck have not been detailed. The escalation follows weeks of back-channel negotiations and public statements from both sides hinting at a possible ceasefire. Each fresh round of strikes complicates the timeline for any agreement, raising the likelihood that supply constraints will persist into the second quarter.
OPEC+ output policy remains a secondary factor for now, as the cartel has largely held production steady. But if the Strait remains disrupted, pressure will mount on Saudi Arabia and the UAE to tap spare capacity — a move that could test their stated production limits. Meanwhile, Iran's ability to retaliate via asymmetric means, including potential attacks on regional oil infrastructure, adds a further layer of uncertainty.
Critics of the hawkish military posture argue that sustained strikes risk entrenching conflict rather than hastening a diplomatic solution. Some analysts suggest that the recent drop in prices had already factored in a deal, and that the current rally may prove short-lived if negotiations quietly resume. The market remains highly reactive to headlines, making directional bets unusually risky.