Oil Prices Surge as Iran Targets U.S. Base After Retaliatory Strikes

Global oil prices experienced a significant surge on Thursday, with Brent crude futures climbing 3.72% to $97.80 per barrel. This sharp increase, which saw prices flirt with the $100 mark, was triggered by Iran's announcement that its Revolutionary Guard Corps had targeted a U.S. air base.

The Iranian action was presented as retaliation for a prior U.S. strike near the airport in Bandar Abbas. According to Iran's state media, the attack on the U.S. base occurred in the early morning hours, serving as a "decisive" warning against further aggression. This marks a significant escalation of tensions in the Middle East.

The renewed conflict comes after both Brent and West Texas Intermediate (WTI) crude benchmarks had fallen over 5% in the previous session. Those earlier declines were attributed to hopes for a potential U.S.-Iran deal that could end the conflict and reopen shipping through the Strait of Hormuz.

Analysts note that oil supply remains tight, with fundamental issues unresolved. Adding to market concerns, U.S. crude inventories fell by 2.8 million barrels last week, marking the sixth consecutive weekly decline, according to the American Petroleum Institute. Official data from the U.S. Energy Information Administration is expected later this week.

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The oil supply remains limited and fundamental issues have not yet been resolved.