The US and Iran once again clashed in the Strait of Hormuz. WTI crude oil briefly rose by 4%, with Brent oil returning to above $100.

The US and Iran have once again erupted in military conflict, casting a shadow over the ceasefire negotiations that have lasted for ten weeks, with international oil prices rising in response. On Thursday, WTI crude oil prices surged by 4% after experiencing intense fluctuations, approaching $99 per barrel, while Brent crude oil prices returned to above $100 per barrel. The US Central Command stated that the US military intercepted Iran's unprovoked attack and retaliated in self-defense when a missile destroyer passed through the Strait of Hormuz. However, the US military command added that they "do not intend to escalate the situation." US President Donald Trump stated on social media that three ships successfully left the waterway without damage after the attack. In regards to Iran, he added: "If they do not sign a deal soon, we will hit them harder and more fiercely in the future!" The focus of the global oil market remains on the Strait of Hormuz, which has been closed since late February. This has caused unprecedented energy supply shocks, with key oil transport routes blocked and oil wells in the region being shut down. The waterway is currently under a dual blockade: Tehran is obstructing navigation, while the US is prohibiting ships from docking or leaving Iranian ports. Dennis Kisler, Senior Vice President of BOK Financial Securities Inc., stated that until oil volumes in this waterway are restored to higher levels, "the downward potential for oil prices will be limited." The latest conflict has escalated tensions in the entire region, while the US is trying to withdraw from the war. This war is increasingly burdening consumers, with retail gasoline and diesel prices soaring. Throughout this week, the Trump administration has been waiting for Iran's response to their proposal to restart TRADELINK, but Iranian leaders have not indicated whether they will accept the terms. As the conflict continues, liquidity in the oil market has sharply declined. With intense news hitting the market one after another and swift changes in market sentiment, oil prices have fluctuated dramatically, leading traders to be more reluctant to hold positions. This further exacerbates the volatility of Brent and WTI crude oil prices. Fatih Birol, Executive Director of the International Energy Agency (IEA), warned that the world is losing 14 million barrels of oil per day due to this war. The recovery of oil production will be a gradual process once the conflict ends. During his visit to Canada on Thursday, he reiterated that the IEA is prepared to take further action, as member countries agreed in March to release 400 million barrels of oil. According to reports, Ray Dalio, founder of Bridgewater Associates, stated that the outcome of the US-Iran conflict can almost be bluntly summed up as who will control the Strait of Hormuz. As of the time of writing, WTI crude oil futures for delivery in June rose by 2.34% to $97.03 per barrel, while Brent crude oil futures for delivery in July rose by 2.07% to $103.37 per barrel.