Oil Prices Rebound as Hormuz Hopes Clash with US Strikes

Oil prices rallied on Wednesday (June 10), erasing the previous session’s losses after US forces struck Iranian military targets and President Donald Trump threatened continued attacks.

Global benchmark Brent crude rose to US$94.32 per barrel, while US West Texas Intermediate had reached US$91.46 per barrel by midday. The immediate catalyst was a US Central Command operation targeting Iranian air defenses, ground control stations and radar sites near the Strait of Hormuz.

The military said the strikes were retaliation for the downing of an American Apache helicopter.

While the Trump initially told the Wall Street Journal that the helicopter incident “wasn’t a big deal” because both pilots survived, his posture hardened just hours later.

“They’ve taken too long to negotiate a deal that would have been great for them, now they will have to pay the price!!!” he posted on Truth Social. According to Fox News, Trump is nearing orders to strike Iranian power plants and bridges.

Tehran warned it will retaliate. Iranian state media claimed the US Navy’s Fifth Fleet base in Bahrain was targeted in a wave of regional explosions, and Iran’s foreign minister, Abbas Araghchi, said US strikes will not go unanswered.

Tehran also indicated it will resume hostilities if Israel continues its campaign against Hezbollah in Lebanon.

The military exchange undercuts recent optimism about an imminent diplomatic resolution. Just days prior, Trump claimed a deal to reopen the Strait of Hormuz was “two or three days away.”

The escalation also offsets indications that physical oil flows are improving. US Secretary of Energy Chris Wright noted Tuesday (June 9) that shipping traffic through the blockaded strait is “rising very meaningfully.”

Furthermore, JPMorgan Chase (NYSE:JPM) analysts estimate up to 2 million barrels per day are exiting the Persian Gulf covertly on tankers operating without transponders.

Lower Chinese crude imports have also helped keep a ceiling on prices.

Domestically, however, the American Petroleum Institute reported a 9.12 million barrel drop in US crude inventories last week, marking the eighth consecutive weekly decline. Gasoline stocks also fell, pushing traders to debate whether commercial reserves are nearing operational minimums ahead of peak summer demand.

Prices remain up roughly 30 percent since the conflict began on February 28.

The war has triggered the largest oil supply disruption in history as the Strait of Hormuz normally handles one-fifth of the world’s crude and liquefied natural gas.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.