Oil prices surged beyond the $85-a-barrel mark on Wednesday as the Middle East once again got embroiled in conflict. Energy supply concerns intensified after the United States reinstated a naval blockade on Iran and fighting between Washington and Tehran escalated, raising fears over crude supplies moving through the Strait of Hormuz.Brent crude and US West Texas Intermediate (WTI) both extended gains for a second consecutive session. Brent crude futures were up $1.01, or 1.19%, at $85.74 a barrel, while WTI gained $0.75, or 0.95%, to $80.09 a barrel. Brent had already jumped 9.6% in the previous session, its biggest one-day rise since May 2020.The rally has taken oil prices to their highest levels since the United States and Iran signed a memorandum of understanding on June 17 aimed at ending the conflict, Reuters reported.The latest move in the market followed US President Donald Trump’s decision to restore a blockade on Iranian shipping in the Strait of Hormuz, alongside fresh military operations against Iran. Trump also said Washington would seek reimbursement from countries benefiting from US naval protection in the region.“We’re hitting them very hard. And it’ll continue, and we’ll see what happens,” Trump told reporters in the Oval Office.“We’re knocking out all of their offensive capability and we’re controlling the straits. We’re putting the blockade back,” he added.Trump also said the United States would charge countries for securing commercial shipping through the Strait of Hormuz, signalling a departure from the longstanding US position of supporting unrestricted navigation through the strategic waterway.As the conflict widened, Iran launched retaliatory attacks across the region. The United Arab Emirates ministry of defence said two UAE oil tankers travelling through the southern lane of the Strait of Hormuz in Omani territorial waters were struck by Iranian cruise missiles. The attack killed one Indian crew member and left eight others injured.Meanwhile, the US Central Command (CENTCOM) said American forces had launched a third consecutive night of strikes on Iranian military targets.“These strikes will continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz,” the US military said.Trump later described the latest operation as “another major attack”.In Iran, the semi-official YJC news agency reported seven explosions in Bandar Abbas and two more on Kish Island, indicating continued US strikes on strategic locations.The latest gains build on Monday’s rally, when Brent crude rose more than 5% after both the United States and Iran claimed control over the Strait of Hormuz. Despite the recent surge, oil prices remain below the wartime peak of nearly $120 a barrel. Analysts, however, warned that continued military escalation could increase volatility in global energy markets.
