WTI traded below $96 a barrel and Brent settled near $98 on Wednesday after oil paused following three straight sessions of gains.
US-Iran strikes threatened prospects for a peace deal that would reopen the Strait of Hormuz, a key route for global crude flows.
Nearly 10% gains in the first three sessions of the week reflected traders' concern that the renewed fighting could disrupt regional supply.
Kuwait and Bahrain were caught in the crossfire in the most serious flare-up since an early-April ceasefire, underscoring wider risks to Gulf energy markets.
With a critical oil strait shut down, is the world heading for a severe energy crisis?
As cheap drones challenge costly defenses, is this the future of asymmetric warfare?
Strait of Hormuz Crisis 2026: Oil Prices Surge, Global Trade Disrupted, and Energy Security at Risk
Overview
On June 1, 2026, Iran halted negotiations over the Strait of Hormuz in response to ongoing ceasefire violations and Israeli military actions in Lebanon. This sudden move shattered investors’ cautious optimism, causing oil prices to surge sharply. The diplomatic situation quickly worsened, with conflicting statements from U.S. and Israeli leaders fueling further uncertainty. As a result, shipping through the Strait faced severe disruption, and hopes for a significant reopening faded. The crisis highlights how escalating regional tensions can rapidly destabilize global energy markets and create lasting economic uncertainty.