US jet fighters targeted Iran’s Kharg Island, a critical oil export hub responsible for 90% of Iran’s oil production, as part of escalating military actions in the ongoing US-Israeli conflict with Iran [1][2]. The Pentagon confirmed the destruction of Kharg Island’s defenses, heightening risks to Iran’s oil infrastructure, though President Trump stated that the strikes did not affect the island's oil facilities themselves and suggested further attacks could occur [1][2]. Trump also indicated the US could remain involved in Iran 'for as long as it takes,' and is seeking support from other countries to secure the Strait of Hormuz, which remains closed for the foreseeable future [1][2].
The closure of the Strait of Hormuz, through which over 20% of the world’s oil supply transits, has intensified fears of prolonged supply disruptions and contributed to a sharp rise in global oil prices [2]. U.S. crude oil surged past $100 per barrel, jumping more than 2% to around $102, while Brent crude reached $106 per barrel [2]. Since the war began, U.S. oil prices have risen nearly 50%, and so far this year, the cost of U.S. crude has increased by nearly 75% [2]. Retail gas prices have also soared, with the national average reaching $3.70 per gallon, up about 70 cents since the start of the conflict [2].
Efforts to stabilize the market included the International Energy Agency’s unanimous decision by 32 member countries to release a collective 400 million barrels of oil in the largest emergency release ever, which temporarily pushed prices below $80 per barrel before they resumed their upward trajectory [2]. Technical analysis from market participants shows crude prices breaking above resistance at $85 per barrel, with support at $82.50 and next resistance at $90, and momentum indicators like the RSI trending higher, reflecting strong buying interest [1]. Analysts warn of increased volatility and a risk premium being priced in, with traders anticipating further upside in oil futures if tensions escalate [1].
Forward-looking statements from officials and analysts highlight ongoing uncertainty. President Trump has not committed to a cease-fire and suggested further strikes may occur [2]. Energy Secretary Chris Wright stated it could be weeks before military escorts are possible for oil tankers, and confirmed the Strait of Hormuz is not safe for shipping [2]. RBC Capital Markets’ Helima Croft emphasized that reopening the Strait is critical to abating the crisis and restoring confidence in energy markets [2].
CONCLUSION
The US strikes on Kharg Island and the closure of the Strait of Hormuz have triggered a sharp surge in oil prices and heightened volatility in global energy markets. Despite emergency measures to stabilize supply, market sentiment remains cautious as geopolitical risks persist and officials warn of ongoing disruptions. Traders and analysts are closely monitoring developments, with further escalation likely to drive prices higher and impact broader financial markets.