Oil prices move higher as Iran threatens response to latest U.S. strikes

• The two-hour U.S. operation targeted dozens of Iranian Revolutionary Guard Corps sites including military command centers, missile and drone facilities, and maritime capabilities across Iran
• The conflict has disrupted shipping through the Strait of Hormuz since fighting began in late February, whipsawing oil markets
• Traders are watching Sunday's OPEC+ meeting where the group is expected to announce a supply increase of 188,000 barrels per day for September

Oil Prices Rise on Renewed U.S.-Iran Tensions

Oil prices climbed Thursday following a "heavy wave" of U.S. strikes against Iran late Wednesday, ending hopes for de-escalation in the regional conflict. Brent crude futures rose 1.5% to $92.10 per barrel, while U.S. crude futures gained 0.9% to $85.23 per barrel.

Key Developments:

The U.S. launched a two-hour operation targeting dozens of Islamic Revolutionary Guard Corps (IRGC) sites across Iran, including military command centers, missile and drone facilities, and maritime capabilities. The strikes were described by U.S. Central Command as a "powerful response" to Iranian missile attacks on American forces earlier in the week. President Trump had warned hours before the action, stating "they're going to get a beating."

Iran's IRGC has threatened further retaliation, raising concerns about additional escalation.

Market Context:

The conflict, which began in late February, has disrupted oil markets and shipping through the critical Strait of Hormuz. The U.S. had paused strikes for two weeks to allow diplomatic efforts, but tensions have now resumed.

Looking Ahead:

Traders are focused on Sunday's OPEC+ meeting, where the producer group is expected to announce a supply increase of 188,000 barrels per day for September. However, ING strategists noted significant uncertainty through 2027 regarding OPEC+ policy and potential disputes over output quotas.

The renewed conflict raises concerns about supply disruptions in a region critical to global oil production and transportation, with market volatility expected to continue as geopolitical tensions remain elevated.