Oil Jumps Over 3% as Iran Threatens US Interests in Middle East

Iran’s threat to unleash “devastating strikes” on U.S. and Israeli interests reignited fears of a wider Middle East conflict, sending oil prices sharply higher on Thursday.

Crude oil prices surged after Iran warned on April 10 that it would attack U.S. and Israeli interests if ceasefire negotiations fail, erasing the previous day's optimism and repricing the risk of a major supply disruption. U.S. West Texas Intermediate (WTI) crude jumped $3, or 3.18 percent, to $97.41 a barrel, clawing back losses from a session earlier when a fragile truce had pushed prices below $100.

"The chances of a meaningful reopening (of the Strait of Hormuz) any time soon look dim," said Vandana Hari, founder of oil market analysis provider Vanda Insights. "The futures market looks a bit broken. Otherwise, prices should have snapped right back to pre-ceasefire levels by now."

The renewed threat puts the focus back on the Strait of Hormuz, a vital waterway that carries about 20 percent of the world's oil and gas supply. Brent crude futures also reflected the heightened risk, rising $2.18, or 2.3 percent, to $96.93 a barrel. The moves highlight the market's hesitancy to price in a lasting peace deal.

The viability of the two-week ceasefire is now in serious doubt, with continued attacks in the region suggesting the truce is not holding. This instability makes it unlikely that shippers will resume normal transit through the Strait of Hormuz, keeping a significant portion of global energy supply at risk and supporting a persistent geopolitical risk premium in prices.

Ceasefire Doubts Fuel Oil's Risk Premium

Analysts noted that market participants are unwilling to remove the geopolitical risk premium that has been a key factor in recent price volatility. Despite Iran issuing maps for safe passage, the security situation remains the primary concern.

"Logistic disconnects, security fears, elevated insurance premiums and operational constraints mean that very little additional energy is likely to be supplied via the Strait of Hormuz in the next two weeks," analysts at Standard Chartered said in a note. The sentiment was echoed by Goldman Sachs, which trimmed its second-quarter 2026 forecasts for Brent and WTI to $90 and $87 a barrel respectively, down from $99 and $91, following the initial ceasefire announcement.

Hostilities Continue Despite Truce

The ceasefire's fragility was underscored by reports of continued attacks even after it was declared. According to an oil industry source, Iran struck a pipeline in Saudi Arabia that is used to bypass the blockaded Strait of Hormuz.

Further missile and drone attacks were reported by Kuwait, Bahrain, and the UAE, indicating that regional hostilities have not ceased. Iran's own state media suggested it would be "unreasonable" to proceed with permanent peace talks while Israel continues to attack Lebanon, making it clear that the path to a stable resolution is narrow and fraught with risk.

This article is for informational purposes only and does not constitute investment advice.