Oil surges over 4% after US strikes Iranian mainland

Oil prices rose by more than 4% on Tuesday after the United States struck Islamic Revolutionary Guard Corps sites in southern Iran, marking its first attacks on the Iranian mainland in just over a month.

What happened: Brent crude, the international benchmark for oil, rose by 4.33% to $94.42 per barrel as of 2 p.m. EDT, after peaking at $94.48 earlier.

US officials said the strikes were carried out in response to Iranian missile attacks on commercial ships. Explosions were reported around the southern Iranian port of Bandar Abbas, as well as in Chabahar and on Qeshm Island in the Strait of Hormuz.

President Donald Trump wrote on Truth Social that the “large and powerful” strikes were a response to Iranian attacks, including one on a US base in Jordan over the weekend and two in the Strait of Hormuz on Monday.

Late on Monday, two supertankers carrying Saudi oil were struck while attempting to exit the strait. Maritime security consultancy Marisks said the Sidr, a very large crude carrier operated by Saudi Arabia’s Bahri shipping company, was struck by a projectile northeast of Khasab, Oman.

The Senegal Prosperity, operated by South Korea’s Sinokor Group, was hit by three missiles east of Oman, according to the Athens-based consultancy.

No one has claimed responsibility for the attacks. Iran's Islamic Revolutionary Guard Corps has targeted ships in the waterway since the US-Israel-Iran war began on Feb. 28, while the United States has attacked vessels as part of its naval blockade of Iranian ports.

The tanker attacks came amid a renewed exchange of fire between Washington and Tehran. The US military struck two Iranian rocket launchers on Iran’s Larak Island on Sunday, the first such US attack since July.

The IRGC subsequently fired ballistic missiles toward US bases in Jordan and claimed a drone attack on Al Minhad Air Base in the United Arab Emirates. Jordan said it intercepted eight Iranian missiles that entered its airspace, while the UAE said it engaged an Iranian drone over its territorial waters but denied that Al Minhad was attacked.

The IRGC also said Monday that an oil tanker attempting to use an “illegal route” through the Strait of Hormuz caught fire after striking two sea mines.

Trump threatened further action after the Iranian missile launches. Speaking to Fox News on Monday evening, Trump said the United States was ready to “hit Iran hard,” adding, “There will be a response.”

Why it matters: The latest rise in prices reflects renewed concern that the first direct US strike on Iran since July could trigger another sustained round of fighting and further restrict the already limited flow of energy supplies through the Strait of Hormuz.

Around a fifth of global oil and liquefied natural gas shipments normally pass through the strait. Traffic has since been severely disrupted by attacks on commercial vessels and the wider conflict, contributing to a global energy shock that pushed oil prices to around $115 a barrel in early May, compared with about $70 before the war.

Monday's traffic through the Strait of Hormuz held at the weekend's rate of around five ships a day, ship-tracking data showed Tuesday, well below the daily average of around 14 vessels recorded over the previous 10 days.

Despite the latest escalation, Iran signaled Tuesday that it remained open to halting the fighting under certain conditions. President Masoud Pezeshkian said Tehran would immediately reciprocate if Washington returned to its commitments under an interim agreement signed in June.

"I state explicitly that if the United States returns to its commitments under the … memorandum of understanding, the Islamic Republic of Iran will immediately take reciprocal action," Pezeshkian said on the sidelines of the Shanghai Cooperation Organization summit in Bishkek, Kyrgyzstan.

The 14-point agreement included reopening the Strait of Hormuz and Iranian commitments to curb its nuclear program. It gave the two sides 60 days to negotiate a more permanent ceasefire, but diplomatic efforts failed and the violence flared again in July.

Know more: US Treasury Secretary Scott Bessent met G20 ministers in North Carolina on Monday and Tuesday as Washington sought support for Operation Economic Outcast, its campaign to isolate Iran financially.

Bessent also told reporters Monday that Iran’s economy could be “weeks or months away” from collapse as the new sanctions and US naval blockade took hold.

This developing story has been updated since initial publication.