Oil Rises on U.S.-Iran Tensions and Strait of Hormuz Fears

CNBC reported Thursday that oil prices climbed in volatile early trading as investors weighed escalating tensions between Washington and Tehran. Markets remained fixated on the Strait of Hormuz, a critical artery for global energy supply.

Crude Benchmarks Push Higher on Geopolitical Anxiety

International benchmark Brent crude for July delivery advanced roughly 0.91% to $102.19 a barrel. U.S. West Texas Intermediate for June delivery rose 1.23% to $96.25 per barrel. Both contracts swung sharply as headlines out of the Middle East shifted by the hour.

Citi U.S. equity strategist Scott Chronert warned that the conflict’s duration carries broad economic consequences. He told CNBC’s Squawk Box that sustained higher oil prices would weigh on growth forecasts across large parts of the market. He also noted the situation complicates Federal Reserve decision-making on interest rates.

Trump Signals Harder Line Despite Talk of a Draft Agreement

Axios had reported that U.S. and Iranian negotiators were close to a one-page, 14-point memorandum of understanding that could end hostilities and establish a framework for further dialogue. The report briefly lifted sentiment.

President Donald Trump then posted on Truth Social that the U.S. military operation, named Operation Epic Fury, could end if Iran accepted agreed terms. However, he added that failure to comply would bring bombing “at a much higher level and intensity.” Trump also said a successful deal would reopen the Strait of Hormuz to all shipping, including Iranian vessels, and lift the U.S. naval blockade of Iranian ports in the Gulf of Oman.

Iranian Foreign Ministry spokesperson Esmaeil Baqaei said Tehran was still reviewing the proposal and would deliver its response through mediators in Pakistan. In a separate post, Baqaei appeared to invoke international court language around what constitutes genuine negotiation, signaling displeasure with the tone coming from Washington.

Why the Strait of Hormuz Matters So Much

The strait sits between Iran and the Arabian Peninsula and carries roughly 20% of global oil trade, making it the world’s most strategically sensitive energy chokepoint. Any sustained blockage sends supply-chain anxiety rippling through commodity markets almost instantly.

Former U.S. Ambassador to Oman Marc Sievers told CNBC that the immediate diplomatic priority has been achieving a full reopening of the waterway. He described a backlog of tankers carrying oil and other cargo that had been unable to transit freely, noting that Iran’s Islamic Revolutionary Guard Corps had sought to impose tolls on passing vessels.

A prolonged standoff risks tightening global supply just as summer fuel demand picks up in major consuming nations.

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