WEB DESK: Oil prices increased more than 4% on Thursday after Iran signaled it would keep the Strait of Hormuz closed as long as a US naval blockade remains in place, even as a temporary ceasefire continues. The move heightened fears of supply disruptions through one of the world’s most critical energy chokepoints.
Early in the session, US benchmark West Texas Intermediate (WTI) climbed over 4% to around $96.70 per barrel, while Brent crude rose about 3.6% to roughly $105.60. Prices later trimmed some gains but remained elevated, reflecting ongoing uncertainty in the Middle East following the conflict that began in late February.
Tensions persist despite a ceasefire extension announced by US President Donald Trump, aimed at allowing more time for Pakistan-mediated negotiations. Iran acknowledged the diplomatic efforts but maintained its position on keeping the strategic waterway restricted. Adding to the strain, Iran’s Revolutionary Guards reportedly seized two vessels shortly after the truce extension, underscoring how fragile the situation remains. Roughly 20% of global oil and LNG flows typically pass through the Strait of Hormuz.
Financial markets reacted in a more mixed but resilient manner. Wall Street rallied, with all three major US indexes posting gains. The S&P 500 and Nasdaq Composite both reached fresh record closing highs, driven largely by strength in technology stocks and continued investor confidence in economic fundamentals.
Analysts suggest markets are betting the disruption will be temporary. Strong corporate earnings, steady consumer spending, and a relatively stable macroeconomic backdrop have helped offset concerns about rising energy costs for now. Still, many companies have flagged oil price volatility as a growing risk in their earnings outlooks.
The Dow Jones Industrial Average rose about 0.7%, while the S&P 500 gained just over 1%, and the Nasdaq jumped more than 1.6%. In contrast, European equities declined for a third consecutive session as geopolitical tensions weighed on sentiment. Asian markets showed mixed performance, with Japan’s Nikkei edging higher while broader regional indexes slipped.
In other asset classes, the US dollar strengthened modestly, while gold also moved higher amid lingering uncertainty. Treasury yields ticked up slightly across maturities. Meanwhile, cryptocurrencies joined the risk-on mood, with Bitcoin rising over 4% and Ethereum gaining nearly 3.5%.
Overall, while equities appear to be shrugging off geopolitical risks for now, prolonged disruption in energy markets especially if the Strait of Hormuz remains closed—could eventually challenge that optimism.
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