The U.S. military shot down four Iranian drones and struck a control centre in the southern Iranian city of Bandar Abbas on Thursday, deepening a fragile ceasefire and sending oil prices higher after days of hope that the fighting might ease.
An American official described the latest action as “measured, purely defensive, and intended to maintain the ceasefire,” but the market read the moment differently. Brent North Sea crude rose 1.8 percent in morning trade to $95.95 a barrel, while West Texas Intermediate climbed 1.7 percent to $90.17 a barrel, reversing some of Wednesday’s losses when prices fell on hopes of an imminent deal to end the conflict.
The moves came as Tehran’s state media said Iranian forces had fired at four ships in the Strait of Hormuz, and Kuwait said its air defences were responding to missile and drone attacks. The Strait remains crucial to global energy flows, and shipping through it has all but halted for months as the Middle East war has shaken trade routes and pushed traders to price in fresh disruption almost by the hour.
The volatility spilled quickly into Asian markets. Hong Kong’s Hang Seng index fell more than 1.5 percent, Seoul was down nearly 1 percent and Shanghai ticked 0.3 percent lower. Taipei’s main index gained more than 1 percent, while Tokyo was flat at the midday break. In corporate markets, SK hynix reached a $1 trillion market capitalisation, a rare milestone even as the broader mood remained fragile.
The latest strikes also landed against a backdrop of mixed signals from Tehran. One Iranian official had said renewed hostilities with the United States were unlikely, even as Donald Trump had previously urged the sides to “finish the job” and Washington had warned that new Iran strikes were possible after ceasefire talks stalled, according to reporting on the issue. That gap between what leaders say and what militaries do has become the defining feature of a ceasefire that looks more like a pause than a settlement.
Stephen Innes, a market strategist, said: “The Strait may eventually reopen fully, but until there is something more concrete than draft frameworks and political theatre, every barrel remains hostage to headline volatility, even if sub-$100”. For now, the conflict is still dictating the price of oil, and traders have little reason to believe the relief rally from Wednesday will last long.
