U.S.-Iran fire exchange rattles fragile Hormuz ceasefire
Aerial view shows a Valero refinery in Corpus Christi, Texas, on May 5, 2026.
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Oil continued its rise on Friday after the United States and Iran exchanged fire in the Strait of Hormuz, fueling fears that a fragile ceasefire between the two countries is unraveling and threatening continued disruption to shipping through one of the world’s most critical oil routes.
International benchmark Brent crude futures for July delivery increased by 2.26% to $102.32 per barrel. U.S. West Texas Intermediate futures for June delivery rose 2.06% to $96.76.
Washington and Tehran accused each other of launching attacks on the Strait of Hormuz, further straining the ceasefire agreement already weakened by repeated allegations of violations. The flare-up comes as Iran is reportedly reviewing a US proposal to end the war.
U.S. President Donald Trump, in a call with an ABC News reporter later Thursday, insisted the ceasefire remained in effect and said the attacks were “just a love tap.”
Oil prices since the beginning of the year
In a post on Truth Social, Trump said US forces destroyed Iranian targets participating in the conflict, including small boats and drones. He also warned that Iran would face more military strikes if it did not reach a nuclear deal.
Market optimism about the possible reopening of the Strait of Hormuz has waned after reports emerged that Washington was preparing to restart naval operations escorting commercial ships through the waterway, ANZ wrote in a note, adding that oil Prices experienced a “rollercoaster rise” as doubts emerged about US-Iran peace negotiations.
Trump then halted “Operation Freedom,” a U.S. naval mission aimed at escorting commercial ships through the Strait of Hormuz.
“The risk of a breakdown of the proposed US peace deal is likely to keep oil markets unstable,” said experts at ANZ Research.
Citi analysts said they expected broader financial markets to stabilize despite recent volatility linked to the Middle East, but the bank warned that the road to normalization was unlikely to be smooth and could keep oil prices high in coming months.
— CNBC’s Kevin Breuninger contributed to this report.
