Oil Prices Surge After US-Iran Clashes in the Strait of Hormuz
BBC Business reported Friday that oil prices spiked sharply after American and Iranian forces exchanged fire in the Strait of Hormuz, raising fresh doubts about a ceasefire struck just weeks ago.
Brent Crude Briefly Tops $100 a Barrel
The global Brent benchmark climbed almost 3% during early trading, touching nearly $103 a barrel. Prices pulled back to roughly $100 as tensions appeared to ease. The move reflected how sensitively energy markets are treating any escalation near the strait. US President Donald Trump told reporters the ceasefire remained in effect. Iranian state media also indicated the situation had stabilised.
Trump described the episode in notably casual terms, calling the Iranian strikes “just a love tap” in comments to ABC News. He confirmed three US destroyers were involved. He added that Iranian small boats were destroyed and incoming missiles were intercepted. The US military denied that any of its vessels sustained damage.
What Happened in the Strait of Hormuz
Iran’s military alleged Washington had broken the ceasefire by targeting Iranian vessels, including an oil tanker, that were transiting toward the strait. Tehran claimed its forces also came under aerial attack along nearby coastal areas and responded by striking US ships. US Central Command pushed back on those claims, describing its actions as defensive and insisting it was not seeking escalation.
The Strait of Hormuz has been effectively closed to normal shipping since late February, when the US and Israel launched military operations against Iran. Before that conflict began, Brent crude was trading around $70 a barrel.
A Ceasefire Under Strain
The April ceasefire was always viewed cautiously by energy traders. National University of Singapore economics researcher Huifeng Chang described market sentiment as treating the truce as a fragile arrangement. Even modest clashes are enough to move prices sharply given the strait’s outsized role in global energy flows. More than a fifth of the world’s oil and gas typically passes through the waterway.
Trump said nuclear negotiations with Tehran were progressing but issued a pointed warning. He told reporters that Iran would face serious consequences if a deal was not reached.
Airlines Feel the Pressure
The broader damage from the conflict extends well beyond crude benchmarks. Jet fuel prices have risen roughly 50% since hostilities began. British Airways parent IAG disclosed Friday that its fuel bill for 2026 is now expected to reach approximately €9 billion, around €2 billion more than last year. The company said it had locked in pricing for about 70% of its remaining fuel requirements. IAG shares fell more than 5% in early London trading.
Chief market analyst Chris Beauchamp at IG said the muted recovery in IAG’s share price reflected limited investor conviction that the conflict would resolve soon.
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