Key Takeaways

• Crude jumps: Brent oil futures rose 2.1% to $103.37 per barrel, while WTI climbed 2.2% to $96.90 — bouncing back after Thursday’s 1% decline.
• Direct clash: Iran accused the U.S. of targeting an Iranian oil tanker and another vessel entering Hormuz, plus strikes on Qeshm Island and coastal areas.
• U.S. self-defense claim: The U.S. military said it acted in self-defense after Iranian drones, missiles, and small boats targeted three U.S. Navy destroyers in the strait.
• No U.S. casualties: Washington reported no American assets were hit.
• “Just a love tap”: Trump downplayed the confrontation in an ABC News interview, insisting the ceasefire still holds.
• Iran calms tone: State media later reported conditions had returned to normal in affected areas.
• Most serious breach yet: The flare-up marks the gravest violation of the April ceasefire to date.
• Pakistan-led diplomacy: Broader peace negotiations remain ongoing despite the renewed clashes.
• Hormuz stakes: The strait carries roughly 20% of global oil and LNG supplies.
• Dollar firms: Geopolitical tensions lifted the greenback and pressured equity futures.
• Jobs data ahead: Investors await the closely watched U.S. nonfarm payrolls report later Friday.

Oil prices advanced more than 2% during Asian trading on Friday after U.S. and Iranian forces exchanged fire near the Strait of Hormuz, despite President Donald Trump’s insistence that the month-old ceasefire remained in effect.

As of 20:05 ET (00:05 GMT), Brent oil futures expiring in July rose 2.1% to $103.37 per barrel, while West Texas Intermediate (WTI) crude futures climbed 2.2% to $96.90 per barrel.

Oil had settled about 1% lower on Thursday after a volatile session.

A Direct Clash Near Hormuz

The gains came after Iran accused the United States of targeting an Iranian oil tanker and another vessel entering the Strait of Hormuz, as well as carrying out strikes on Qeshm Island and nearby coastal areas.

The U.S. military said it had acted in self-defense after Iranian drones, missiles, and small boats targeted three U.S. Navy destroyers transiting the strategic waterway. Washington said no U.S. assets were hit in the exchange.

Trump sought to calm markets, describing the confrontation as “just a love tap” and telling ABC News that the ceasefire with Iran was still holding. Iranian state media later reported that conditions had returned to normal in the affected areas.

Markets Stay on Edge

Still, traders remained jittery over the risk of escalating conflict around the Strait of Hormuz, through which roughly a fifth of global oil and LNG supplies pass.

The latest flare-up marked the most serious breach yet of the fragile ceasefire brokered in April after weeks of conflict between Washington and Tehran. Diplomatic efforts led by Pakistan to secure a broader agreement remain underway.

The geopolitical tensions also lifted the U.S. dollar and pressured equity futures, with investors shifting toward safe-haven assets ahead of the closely watched U.S. non-farm payrolls report due later on Friday.