Oil rises $2 as Iran announces closure of Strait of Hormuz following US strikes

Oil prices climbed more than $2 a barrel on Thursday after Iran declared the critical energy chokepoint, the Strait of Hormuz, closed following additional U.S. strikes against the country. Brent futures rose $2.30, or 2.47 percent, to $95.40 a barrel, while U.S. West Texas Intermediate (WTI) crude climbed $2.60, or 2.89 percent, to $92.63.

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Iran's top joint military command announced the closure of the Strait of Hormuz on Thursday, including oil tankers and commercial ships, saying any vessel that will attempt passage will be shot at.

Iran's top joint military command announced the closure of the Strait of Hormuz on Thursday, encompassing oil tankers and commercial ships. They warned that any vessel attempting passage would be fired upon. However, the U.S. military stated on X on Wednesday that commercial ships continue to transit in and out of the strait. The U.S. also denied Iranian state media reports that U.S. ships near the waterway were targeted by missiles and drones.

U.S. forces began launching additional strikes against multiple targets in Iran at 5:15 p.m. EDT (21:15 GMT). These strikes are the latest in an escalating exchange of attacks that threaten to reignite a full-scale war, which had been paused in early April following a fragile ceasefire agreement. Iran's months-long blockade of the strait, which normally carries a fifth of the global oil and gas shipments, has kept oil prices elevated.

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Commercial ships continue to transit in and out of the strait.

Meanwhile, U.S. crude inventories fell by 7.2 million barrels to 426.5 million barrels in the week ended June 5, according to the EIA. This decline was compared with analysts' expectations in a Reuters poll for a 4 million-barrel draw. U.S. crude inventories, including those from strategic reserves, have fallen by 79 million barrels since the Iran war began on February 28, as the world's largest producer stepped in to fill supply gaps left by the effective closure of the strait.

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No U.S. warships have been struck in the strait.