Oil Prices Climb After Renewed US-Iran Strikes Threaten Strait of Hormuz Reopening

Energy markets remain on edge at the end of June 2026 as the durability of the US-Iran ceasefire comes under renewed strain. Oil prices climbed on June 29 after tit-for-tat military strikes over the weekend reignited concerns about crude supply from the Middle East. Brent crude, the primary international benchmark, rose about 0.9% to trade around $72.55 a barrel, while West Texas Intermediate (WTI) gained 1.3% to $70.17. WTI had settled below $70 the previous Friday for the first time since February 27 — the day before the Iran war began.

The immediate cause was a flare-up in hostilities. US Central Command announced strikes against Iran on June 26 and 27, citing Iranian attacks on two commercial vessels in the Strait of Hormuz. Iran responded by launching missiles and drones targeting US military assets in Bahrain and Kuwait. The two sides subsequently agreed to pause attacks and renew negotiations, with talks reportedly planned in Doha and Switzerland, though implementation of the June 17 memorandum of understanding signed by Presidents Trump and Pezeshkian remains fragile.

The broader context is one of extraordinary volatility. Brent crude had surged from approximately $75 per barrel at the start of 2026 to highs near $120 during the peak of the conflict, before collapsing on ceasefire optimism. The Strait of Hormuz — through which roughly 20% of the world's oil and liquefied natural gas normally passes — has been functionally disrupted, and analysts warn that even with a durable ceasefire, it could take many months for energy flows to fully normalize given the backlog of trapped vessels and concerns about naval mines. Svein Ringbakken of the Norwegian Shipowners' Mutual War Risks Insurance Association noted that thousands of ships remained trapped in and around the waterway.

The oil price trajectory has profound implications for the global economy. Elevated energy costs have been the primary driver of the inflation surge that pushed US CPI to a three-year high and prompted the Federal Reserve, Bank of Japan, and Reserve Bank of India to adopt more cautious, hawkish stances. For the marine and energy insurance sectors, the conflict has driven up war-risk premiums and created significant claims uncertainty, while gold and other safe-haven assets have swung sharply with each twist in the conflict.