Crude Oil Rallies as Trump Warns Iran of Additional Strikes Amid Hormuz Tensions

Key Points

Table of Contents

Crude oil benchmarks extended their rally Wednesday, with Brent reaching $85.23 per barrel and WTI climbing to $79.67
Washington reinstated its naval blockade targeting Iranian vessels in the Strait of Hormuz on Tuesday evening
President Trump warned of expanded military action against Iranian infrastructure, including power grids and transportation networks, unless diplomatic talks resume
A proposed 20% transit tax on vessels passing through Hormuz was scrapped following opposition from Gulf state partners
Maritime traffic through the critical waterway has been significantly disrupted, though not completely halted, amid escalating hostilities

Oil prices extended their upward trajectory Wednesday, marking the third consecutive session of gains as escalating U.S.-Iran hostilities fueled concerns about global energy supplies. Brent crude advanced 0.6% to settle at $85.23 per barrel, while West Texas Intermediate added 0.4% to close at $79.67.

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Brent Crude Oil Last Day Financ (BZ=F)

The two major benchmarks are now trading near their strongest levels in approximately four weeks. Combined gains from Monday and Tuesday sessions had already pushed prices up nearly 10%.

Renewed Military Action Heightens Supply Concerns

U.S. forces conducted additional strikes against Iranian military assets in the early morning hours Wednesday. Military officials stated the operation aimed to neutralize Iran’s capability to threaten commercial maritime traffic transiting the Strait of Hormuz.

BREAKING: President Trump held a Situation Room meeting on Tuesday to discuss a “massive offensive” in Iran, per Axios.

Details include:

1. The offense will include strikes that are wider in scope than the current strikes around the Strait of Hormuz

2. Trump was joined in the…

— The Kobeissi Letter (@KobeissiLetter) July 15, 2026

Speaking during a Fox News broadcast, President Trump indicated Washington would continue military operations against Tehran until Iranian leadership agrees to return to diplomatic negotiations. He specifically mentioned that critical infrastructure including electrical generation facilities and major bridges could become targets within the next seven days if no diplomatic progress occurs.

The president clarified that oil production and energy infrastructure would remain off-limits in the immediate term.

Washington officially reinstated its naval blockade preventing Iranian commercial shipping from using the strait late Tuesday. The blockade implementation followed just one hour after the most recent military strikes concluded.

Trump had previously floated the idea of imposing a 20% levy on all cargo transiting through the Strait of Hormuz. The proposal was abandoned after facing strong resistance from allied Gulf nations. The president indicated that anticipated revenue losses would be offset through direct financial commitments from regional partners, though specific figures and participating countries were not disclosed.

Critical Waterway Faces Major Disruption

The Strait of Hormuz serves as the transit point for approximately 20% of the world’s crude oil and liquefied natural gas supplies. While vessel traffic has been substantially reduced, the waterway has not been completely shut down.

Scott Shelton, an energy markets analyst at TP ICAP, noted the fluid nature of the crisis. “Are we in an active state of war? Can the U.S. successfully maintain control over the Strait of Hormuz to allow non-Iranian vessels safe passage? At this moment, no traffic is moving through,” he observed.

Yemen-based Houthi forces, which maintain ties to Iran, launched ballistic missile and drone attacks targeting Saudi Arabian territory. The strikes represent the most significant aggression between the parties since a 2022 truce took effect.

Weekly petroleum inventory figures released by the American Petroleum Institute indicated U.S. crude stockpiles declined by approximately 600,000 barrels. The drawdown fell significantly short of analyst forecasts, which had predicted a reduction of roughly 2.7 million barrels.

The breakdown of a temporary ceasefire agreement between Washington and Tehran triggered the current wave of military action. The confrontation has brought shipping operations in the strategic waterway to virtual paralysis, with no immediate diplomatic solution apparent.

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