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

CNBC reported Thursday that oil prices advanced in choppy early trading as investors watched escalating friction between Washington and Tehran. The Strait of Hormuz remained the dominant flashpoint driving energy market anxiety.

Crude Benchmarks Push Higher

International benchmark Brent crude for July delivery gained roughly 0.67% to reach $101.95 a barrel. U.S. West Texas Intermediate for June added about 0.65%, settling near $95.70 per barrel. Both contracts have remained elevated amid persistent uncertainty over whether the critical waterway will reopen fully to commercial shipping.

Trump Delivers Stark Warning to Tehran

President Donald Trump raised market anxiety Wednesday with a post on Truth Social threatening a far heavier military campaign against Iran if a peace agreement is not reached. Trump stated that the U.S. military operation, described as Operation Epic Fury, could end if Tehran agreed to outstanding terms. He specifically noted the U.S. naval blockade of Iranian ports in the Gulf of Oman would be lifted, allowing the Strait of Hormuz to reopen to all vessels. However, Trump warned that a failure to agree would trigger strikes of greater scale and intensity than those already conducted.

The remarks followed an Axios report indicating Washington and Tehran were close to agreeing on a 14-point memorandum of understanding to end hostilities and establish a negotiating framework.

Iran Pushes Back on U.S. Pressure

Iranian Foreign Ministry spokesperson Esmaeil Baqaei said Tehran was still reviewing the American proposal and would relay its formal response through Pakistani mediators. In a separate post on X, Baqaei invoked language from the International Court of Justice, arguing that legitimate negotiations require good faith and cannot amount to coercion or dictation. The statement signalled Tehran’s resistance to accepting terms under military pressure.

Background: Why Hormuz Matters So Much

The Strait of Hormuz is the world’s most important oil chokepoint. Roughly 20% of global petroleum trade passes through the narrow waterway between Iran and Oman. Any sustained closure or toll regime imposed by Iran’s Islamic Revolutionary Guard Corps could tighten global supply significantly and keep upward pressure on prices for months.

Former U.S. Ambassador to Oman Marc Sievers told CNBC that a complete reopening of the strait, free of any IRGC toll on tanker passage, has been the primary near-term objective for U.S. negotiators.

Citi U.S. equity strategist Scott Chronert cautioned that a prolonged conflict could complicate Federal Reserve interest rate decisions by sustaining inflation pressure through elevated energy costs.

Read Next: Fed Holds Rates Steady as Inflation Risks Persist