US Strikes Iran After Ship Attacks, Oil Surges on Strait Risk

The US military launched fresh strikes on Iran after alleged attacks on commercial ships in the Strait of Hormuz, a critical chokepoint for global oil flows. Crude prices surged on the news, extending gains from earlier in the session as traders priced in the risk of a prolonged disruption. The strikes follow attacks on commercial ships in the strait, which had already pushed oil higher. (see U.S. Strikes Iran After Ship Attacks; Oil Surges, USO Rises)

Defense contractors also moved higher as the Pentagon signaled readiness for further operations. The move escalates a confrontation that had simmered for weeks after earlier incidents near the strait. Shipping insurance rates had already climbed, and the fresh US response could delay any return to normal transit patterns.

The Strait of Hormuz handles about 20% of global oil supply. Any sustained closure or harassment by Iran would pressure refiners in Asia and Europe hardest, as they depend on crude from Saudi Arabia, Iraq, and the UAE. US producers, by contrast, could see a tailwind from higher global prices and increased demand for American crude exports.

The broader equity market took the news in stride, with the S&P 500 dipping slightly on the open before recovering. Energy stocks led gains. Safe-haven flows into gold and the US dollar were modest, suggesting investors see this as a contained escalation rather than a broader regional war.