Oil Prices Surge 2% as Renewed Strait of Hormuz Concerns Raise Supply Fears

Oil prices jumped more than 2% on Thursday after an unidentified projectile struck a cargo vessel, disrupting efforts to secure and guide ships through the strategic Strait of Hormuz and reviving concerns over global energy supply disruptions.

The incident renewed market fears over the stability of oil and gas flows through one of the world’s most important energy chokepoints, where tensions have remained elevated since the outbreak of the US-Israel conflict with Iran in late February.

Oil shipments through the strait had faced disruptions following the attacks, but a US-Iran agreement aimed at ending the conflict had allowed maritime traffic to gradually resume after Iran imposed what was described as an effective blockade on the passage.

The International Maritime Organization announced the suspension of efforts to guide ships and crews through the strait after a cargo vessel reported a suspected attack, increasing concerns that the fragile ceasefire arrangement could face renewed pressure.

Following the market close, two US officials told Reuters that Iran had fired on the cargo ship while it was attempting to cross the strait. Iranian authorities, meanwhile, said the safety of vessels traveling outside designated routes in Hormuz could not be guaranteed.

Brent crude oil futures rose by $1.52, or 2.1%, settling at $75.26 per barrel.

West Texas Intermediate crude oil gained $1.58, or 2.3%, closing at $71.92 per barrel.

The two benchmarks had ended Wednesday at their lowest levels since February 27, following a recovery in oil shipments through the Strait of Hormuz to their strongest levels since the start of the conflict.

The renewed geopolitical concerns also pushed US fuel markets higher as U.S. gasoline futures climbed nearly 5%, and U.S. diesel futures increased around 4%.

Analysts said technical buying and short-covering also contributed to the price rebound, after the market had remained in oversold territory for more than a week.

Separately, fears of thousands of casualties in Venezuela following two powerful earthquakes near Caracas have raised concerns that the expected increase in Venezuelan oil exports could be delayed.

The potential disruption could affect plans that the administration of US President Donald Trump had been relying on to boost Venezuelan crude supply.

Market participants continue to monitor developments in the Strait of Hormuz, where any prolonged disruption could have a major impact on global oil flows and prices.