Oil surges as renewed hostilities between the US and Iran threaten supply routes, despite partial de-escalation signals from Washington.
Oil prices climbed sharply this week after the US and Iran exchanged military strikes, reigniting supply concerns. The US targeted Iranian positions following attacks on three vessels in the Strait of Hormuz, while Iran retaliated with strikes on US bases in Bahrain and Kuwait. Traffic through the critical chokepoint has since declined, amplifying fears of prolonged disruptions.
Prior to the escalation, crude had stabilized near $68 support, but geopolitical tensions drove a rebound. President Trump later signaled a potential thaw, claiming Iran sought negotiations, which briefly eased the risk premium. However, lingering uncertainty continues to support prices ahead of key US inflation data.
Markets now await the US CPI report, with softer data potentially boosting oil on improved demand expectations and reduced Fed tightening risks. Conversely, a higher-than-expected print could pressure prices amid hawkish repricing.