Oil prices soared over 3% on Thursday, with Brent and WTI crude futures making significant gains, following fresh U.S. strikes in Iran and a subsequent claim by Iran’s Revolutionary Guards of targeting a U.S. airbase. These escalating geopolitical events are reigniting acute concerns over potential disruptions to commercial shipping through the strategically critical Strait of Hormuz, driving market unease.
The prolonged rally in crude prices is also fueling fears of broader inflation, prompting central banks to consider more hawkish monetary policies to mitigate energy-driven economic pressures.
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Global oil markets experienced a significant rally on Thursday, with crude prices surging over 3% as escalating tensions between the U.S. and Iran rekindled fears of potential disruptions to vital commercial shipping lanes in the Middle East.
The international benchmark, Brent crude futures, climbed robustly, gaining more than 3% to reach $97.29 per barrel. Concurrently, West Texas Intermediate (WTI) futures also saw a strong rise, increasing by 3.42% to $91.71 per barrel, reflecting the market's heightened sensitivity to geopolitical instability.
In an aerial view, a Valero refinery is seen on May 5, 2026 in Corpus Christi, Texas.
Brandon Bell | Getty Images
The latest uptick in tensions followed an announcement by Iran's Revolutionary Guards (IRGC) on Thursday, claiming they had targeted a U.S. airbase around 4:50 a.m. local time. This assertion, reported by Iran's semi-official Tasnim news agency, did not specify the location of the alleged airbase.
This Iranian claim came in the wake of recent American military actions. U.S. forces had launched fresh strikes in Iran against a military site, which officials stated posed a threat to U.S. troops stationed in the region and to the crucial flow of commercial shipping through the Strait of Hormuz. Reports also indicated that U.S. forces successfully intercepted and downed several Iranian drones during these engagements.
While oil markets found a somewhat firmer footing, as investors previously began to price out worst-case supply disruption scenarios amidst signs of potential diplomatic movement between Washington and Tehran, Citi bank issued a cautionary note. In a report published late Wednesday, Citi highlighted that the prolonged elevation in crude prices was starting to permeate broader inflation metrics, particularly through "second-round effects."
This persistent energy-driven inflation risk, according to Citi, is prompting central banks globally to maintain a more hawkish stance, weighing tighter monetary settings to combat the economic pressures stemming from rising energy costs.
