Oil Prices Rise Sharply After US Strikes Iran

Oil prices jumped Sunday night after the US launched airstrikes on Iran’s key nuclear sites, intensifying fears of a broader regional conflict. The strikes triggered concern that Iran could retaliate by closing the Strait of Hormuz, a vital oil transit route that handles about 20% of global oil flows.

Brent crude rose as much as 5.7% before settling near $76 per barrel.

WTI crude climbed over 2%, trading around $75.

Markets are reacting not just to immediate geopolitical risk, but to the growing possibility of a supply shock if Iran carries out threats to restrict maritime traffic through the strait.

Iran Votes to Close Strait

Iran’s parliament voted to close the Strait of Hormuz in response to the US airstrikes, though the final decision lies with the country’s Supreme National Security Council and Supreme Leader Ayatollah Ali Khamenei.

Wall Street is no longer treating such a move as a remote risk. A potential closure of the strait is now viewed as a serious threat to oil supply, especially given past patterns.

Note: JPMorgan has warned that under a severe outcome, oil could hit $120–$130 per barrel.

Past Conflicts Show What to Expect

Historically, oil prices only show lasting spikes when regional producers are directly involved. Unlike previous Israel-based conflicts, this one includes both Iran and US military involvement, making it more impactful.

JPMorgan estimates that during major oil-related conflicts, oil trades at a $7–$14 premium above fair value. In cases of regime change, oil has risen by an average of 76% from the start of the event to the price peak.

OPEC+ Had Raised Output Before Conflict Escalated. Before the June 13 Israeli strike that escalated tensions, OPEC+ had already increased oil output. If Iranian exports are significantly reduced, and other producers don’t or can’t ramp up supply quickly, the market could face a prolonged imbalance.