Oil prices jump over 3% after fresh US strikes on Iran; Brent tops $97/barrel

Oil prices rose over 3 per cent in early trade on Thursday after reports said the United States carried out fresh overnight strikes on an Iranian military facility, escalating geopolitical tensions despite ongoing negotiations between Washington and Tehran to end their three-month conflict.

Brent crude futures gained $3.51, or 3.72 per cent, to trade at $97.80 per barrel. The more actively traded August Brent contract rose $3.39, or 3.67 per cent, to $95.64 per barrel. The July contract is set to expire on Friday.

US West Texas Intermediate (WTI) crude futures also moved higher, rising $3.34, or 3.77 per cent, to $92.02 per barrel.

The sharp rebound came a day after both global crude benchmarks had fallen more than 5 per cent and touched their lowest levels in nearly a month. The earlier decline was driven by optimism that a possible US-Iran agreement could ease tensions in the region and reopen the Strait of Hormuz.

What is driving crude oil prices today?

Market sentiment turned cautious again after President Donald Trump said he was “not satisfied” with the ongoing negotiations with Iran.

The White House also rejected an Iranian report that claimed Tehran and Oman would jointly oversee the Strait of Hormuz under a proposed draft agreement.

According to international media reports, the US launched fresh strikes in Iran targeting a site considered a threat to American forces and maritime traffic in the Strait of Hormuz. Earlier this week, Washington had already carried out attacks near the strategic shipping route.

The Strait of Hormuz remains a major concern for global energy markets as it handles a significant share of the world’s crude oil shipments. Any disruption in the region raises fears of supply constraints and higher freight costs.

Crude still headed for weekly decline

Despite Thursday’s rebound, oil prices are still on track for a second consecutive weekly decline as traders continue to expect that both countries could eventually reach at least an interim agreement.

However, major hurdles remain unresolved. Key sticking points include Iran’s nuclear programme and Tehran’s demand to retain control over the Strait of Hormuz, which continues to face a dual blockade by Iran and the US.

Trump, during a White House meeting, said he would not accept what he described as an “unfavourable” deal and reiterated that the US would not lift sanctions on Iran. Tehran, meanwhile, has demanded an end to military attacks and economic restrictions as part of any agreement.

The US President is also facing pressure from Republican hardliners to continue the conflict, which entered its fourth month after tensions escalated in February.