US strikes on Iran push crude oil above $78 a barrel as Hormuz risks return

Crude oil prices climbed around 1% on Thursday after the United States launched fresh military strikes against Iran, reigniting concerns over supply disruptions through the Strait of Hormuz and reversing hopes of a lasting de-escalation in the West Asia conflict.

Brent crude futures rose 78 cents, or 1%, to $78.80 a barrel, while US West Texas Intermediate (WTI) crude gained 74 cents, or 1.01%, to $74.26 a barrel in early trade. The gains came after both benchmarks had already advanced sharply in post-settlement trading on Wednesday following reports of renewed US military action.

Earlier in the previous session, Brent and WTI had settled at their highest levels in more than two weeks after US President Donald Trump warned of additional military strikes against Iran.

According to the US military, the latest operation was aimed at ensuring the Strait of Hormuz remained open to commercial shipping, hours after Trump declared that an interim agreement to end the conflict was "over".

The Strait of Hormuz is one of the world's most critical energy corridors, carrying around one-fifth of global oil supplies before the outbreak of the conflict. Any disruption to traffic through the narrow waterway has the potential to tighten global crude supplies and increase energy prices.

Market participants are also closely monitoring developments in the shipping industry. Analysts believe vessel operators are likely to adopt a more cautious approach as security risks escalate.

The latest US strikes followed Tuesday's attack on three tankers transiting the Strait of Hormuz, which Washington blamed on Iran. The renewed military action reportedly shook several cities along Iran's southern coast and disrupted electricity supply in some areas.

Iran, meanwhile, said on Wednesday that it had targeted US military facilities in Bahrain and Kuwait in retaliation for earlier American strikes on its infrastructure.

The deteriorating security situation has also prompted war-risk underwriters to reassess insurance coverage. Reports say that several insurers have advised shipping companies to temporarily suspend voyages through the Strait of Hormuz, while others are reviewing policy terms as attacks on commercial vessels intensify.

The renewed hostilities have reinforced market expectations of continued volatility in global oil prices.