Oil Prices Spike as Iran Declares Strait of Hormuz Closed

Key Points:

• Oil prices surged in early Asian trading, with Brent crude rising 2.26% to $95.20 per barrel and West Texas Intermediate up 2.5% to $92.30, following Iran's declaration that the Strait of Hormuz is closed after new U.S. strikes on the country.
• The recent escalation began with the downing of a U.S. Apache helicopter near the Strait of Hormuz, leading to U.S. retaliatory attacks on Iranian military targets, including disabling a tanker attempting to breach the U.S. blockade.
• Iran's Revolutionary Guards Navy reportedly hit two ships violating the Strait closure, although the U.S. Central Command denied these claims and the Strait's closure, disputing reports via social media fact checks.
• Iranian media claimed the IRGC targeted 18 U.S. military sites and the U.S. Fifth Fleet headquarters in Bahrain, prompting sirens and safety warnings in Bahrain, marking the most severe U.S.-Iran conflict escalation since a fragile ceasefire in April.
• The U.S. Energy Information Administration reported a significant drawdown in U.S. crude inventories, contributing to upward pressure on oil prices amid ongoing tensions and no immediate diplomatic resolution in sight.