Oil roars back on renewed war fears
Crude prices shot higher on Wednesday after President Trump pronounced the interim truce with Iran dead and said American forces could strike again within hours, according to Reuters. His warning came after Iran hit US military bases across the Gulf, and it dragged the Strait of Hormuz straight back into the headlines. Traders wasted no time piling in.
Brent crude jumped 6.6% to $79.38 a barrel and briefly touched $80 during the session. WTI rose 4.2% to $73.52 after trading as high as $75.85. Just a week ago both benchmarks sat at three-month lows near $68, weighed down by a flood of returning supply.
What changed
Two things flipped the mood in a single day.
First, Washington canceled the license that had let Iran sell crude again on the open market. That 60-day permission had helped drag prices to their June lows by putting sidelined Iranian barrels back into circulation. Tearing it up does the reverse, pulling those barrels out again.
Second, and more important, the strike threat revived the fear that has driven this entire market: another closure of the Strait of Hormuz. Roughly one in five barrels of the world's seaborne oil moves through that narrow waterway. Any hint that Iran might block it, or that shipowners will steer clear, is enough to move prices fast.
Where the stress shows
The move was not evenly spread, and that tells you what traders are worried about.
Brent, the global benchmark, outran WTI by more than two dollars, widening the gap between them to nearly $6. Diesel and heating oil led the whole complex, with heating oil futures spiking about 13% to $3.73 a gallon. Both signals point the same way: the worry is about international supply and the fuels most exposed to a Gulf disruption, not US demand.
The timing stings for OPEC+, which only agreed on Sunday to add more barrels for August on the assumption that the market was oversupplied. That call looks very different tonight.
For now, everything hangs on whether the strikes happen and how Tehran answers. Traders have watched this movie before, and they are not waiting around to see how it ends.