Oil prices rise as Iran threatens response to U.S. strikes
Brent and WTI climbed Thursday after U.S. strikes on Iran revived supply concerns ahead of an OPEC+ meeting.
By Maya Okafor · Markets Writer
· 3 min read
Oil prices rose Thursday as Iran threatened to respond to a new round of U.S. strikes, putting geopolitical risk back at the center of the energy market. For everyday investors, the move matters because crude prices feed into inflation, fuel costs and the earnings outlook for companies tied to transportation, chemicals and energy.
Brent crude futures, the global oil benchmark, climbed 1.5% to $92.10 a barrel. U.S. West Texas Intermediate futures rose 0.9% to $85.23 a barrel. A futures contract is an agreement to buy or sell a commodity at a set price later, and traders use it to express where they think supply and demand are headed.
The move followed U.S. strikes late Wednesday against Iranian targets. The U.S. said the operation came after attempted Iranian missile attacks on American forces in the Middle East on Tuesday. Iran’s Islamic Revolutionary Guard Corps threatened additional escalation in response.
Why are oil prices rising after the U.S. strikes on Iran?
Oil prices tend to rise when traders see a higher risk that supply could be disrupted. The current conflict has affected shipping through the Strait of Hormuz since fighting began in late February, and that waterway is a key route for moving oil out of the region.
The latest U.S. action also reduced hopes that the conflict might cool. The U.S. had stopped two weeks of attacks on Iranian targets last weekend while diplomats tried to create room for peace talks.
President Donald Trump had signaled retaliation before the operation. Speaking to a Fox News reporter early Wednesday, Trump said the U.S. would hit Iran hard and that Iran was “going to get a beating.”
U.S. Central Command described the strikes as a “powerful response” to the attempted attacks on U.S. forces. Centcom said the two-hour operation targeted dozens of Islamic Revolutionary Guard Corps sites across Iran, including command centers, missile and drone facilities, coastal surveillance and defense sites, and maritime capabilities.
What traders are watching next
The next major scheduled event for the oil market is Sunday’s OPEC+ meeting. OPEC+ is the group of oil-producing countries, led by OPEC members and allied producers, that coordinates production policy in an effort to influence global supply.
The group is expected to announce a September supply increase of 188,000 barrels per day. More supply can ease upward pressure on prices if demand holds steady, though geopolitical disruptions can offset the effect of planned output increases.
ING strategists wrote Wednesday that the group’s policy will be a major source of uncertainty through 2027, citing the potential for resistance around output quotas. Output quotas are production limits assigned to members, and disagreements over them can affect how much oil actually reaches the market.
For investors, the near-term setup ties oil prices to two tracks at once: military escalation in the Middle East and production decisions from OPEC+. Both can move crude quickly, which can then spill into gasoline prices, inflation expectations and energy-linked stocks.
This story draws on original reporting from CNBC.
