Oil rose for a second straight day as the US hit targets inside Iran again, pushing West Texas Intermediate as much as 2.2 per cent higher to top US$75 a barrel. It had already gained more than 4 per cent on July 8. Brent closed near US$78.
US Central Command said the new strikes were meant to degrade Iran’s ability to threaten freedom of navigation in the Strait of Hormuz. Tehran answered by threatening a large-scale retaliatory operation against US bases in the region.
Trump ends the interim deal
On July 8, President Donald Trump said the interim peace agreement with Iran was over. He raised the possibility of putting a blockade back on Iran’s ports and warned that crude could climb further. He also said the strikes might include a “takeover” of Kharg Island, Iran’s export hub.
In a social-media post, Trump called the attacks “retribution” for Iranian strikes on ships. “If it happens again, it will get much worse!” he wrote.
The fighting came after a spate of attacks on commercial vessels. Hormuz connects Persian Gulf producers to global markets, and it sits at the centre of the dispute. Earlier in the week, three ships were attacked, according to ANZ Group Holdings analysts.
Before the US struck, the Treasury revoked a sanctions waiver that had let Tehran sell oil. That reversed a key part of the interim deal. Under the sanctions relief, millions of barrels of Iranian crude had flowed out of the Gulf in recent weeks, and much of it is now in limbo.
What analysts are saying
Futures have partly retraced losses from the second quarter. Traders now have to price in what happens to Hormuz traffic.
“If we’re going back to a closed Strait of Hormuz, we’re probably going up another US$10,” said Scott Shelton, an analyst at TP ICAP. “If oil continues to flow, prob won’t go up much more than this. It’s really anyone’s guess.”
Henry Hoffman, co-portfolio manager of the Catalyst Energy Infrastructure Fund, argued the strait never fully got back to normal. “The Strait of Hormuz never truly reopened in a normalised way, and now we could see further production shut-ins from producers that depend on the strait for export egress,” he said. He added that a larger escalation “could cause much more significant damage to regional energy infrastructure, with effects that last well beyond the initial price spike.”
ANZ’s analysts, including Daniel Hynes, wrote that transits of the waterway had been rising before the ship attacks. “The recovery of supply is now at risk of being stopped in its tracks as Iran looks to reassert its control,” the note said.
Sources
- Oil extends surge as fresh US strikes against Iran rattle market
- Economic impact of the 2026 Iran war
