US strikes Iran for second night as Strait of Hormuz tensions push oil 3.9% higher

The United States launched a second consecutive night of strikes on Iran on Sunday, hitting dozens of military targets after Tehran fired on a commercial vessel in the Strait of Hormuz, sending Brent crude above $78 a barrel and triggering a broad selloff in risk assets from Seoul to New York.

"The United States has committed some of the most heinous acts of war crimes by attacking Iran's transportation infrastructure, fishing vessels, cargo barges and meteorological facilities," Iran's Foreign Ministry said in a statement, warning neighboring countries against assisting any military action against the country.

US Central Command said it struck Iranian air defense systems, coastal radar sites, missile and drone capabilities, and small boats using fighter planes, naval vessels and one-way attack sea drones for the first time. The operation came after Iran's Islamic Revolutionary Guard Corps fired on a Cyprus-flagged container ship in the Strait of Hormuz, causing "significant engineroom damage" and leaving a civilian crew member missing, according to CENTCOM. The vessel had been traveling along the Omani coastline — the alternative route ships have used to avoid Iranian territorial waters since the war began.

Brent crude rose 3.92% to $78.99 a barrel Sunday, while US crude climbed 3.44% to $73.87. The increase remained "pretty tame" relative to wartime highs, said Bob McNally, founder and president of Rapidan Energy Group, noting Brent had reached $115 a barrel in April before retreating. An average gallon of gas in the US now costs about $3.87, up 30% since the war began Feb. 28, according to AAA data. The Strait of Hormuz handled about a fifth of all traded oil and natural gas before the conflict, and Iran's grip on the waterway during the war triggered a global energy crisis.

Oil prices and the Strait of Hormuz

Iran declared the strait would remain closed "until further notice" and said it would consider targeting "additional enemy bases in the region" if it faced more attacks. The latest violence followed a meeting Saturday between Iran's and Oman's foreign ministers to discuss the waterway, which sits in both countries' territorial waters but has long been considered an international passage. Oman said both sides agreed to keep talking "at the technical and political levels," though Iran offered no statement about reopening the strait.

The escalation threatens the interim deal signed last month between Washington and Tehran, which President Donald Trump suggested was "over" in recent days. US Defense Secretary Pete Hegseth wrote online: "Iran made a poor choice. Now they pay." US officials, speaking on condition of anonymity, said the resumption of strikes resulted from a rogue faction of Iranian hard-liners trying to sabotage the ceasefire, though Iran has insisted its theocracy is unified under the new supreme leader.

Markets react across asset classes

The crossfire extended well beyond oil markets. South Korea's Kospi index lost 9.2% as SK Hynix slumped 15%, while Japan's Nikkei and China's SSE both fell more than 2%. US equity futures pointed lower, with Nasdaq 100 futures dropping 0.9% and S&P 500 futures slipping 0.25%. Bitcoin fell about 1% to $63,100, and $253 million in leveraged crypto positions were liquidated within 24 hours, CoinDesk data show.

Iran retaliated for the US strikes by targeting US military infrastructure in Bahrain, Kuwait and Qatar. The IRGC said it struck helicopter maintenance facilities, a P-8 Poseidon aircraft hangar and a drone command center at the US Air Base in Sheikh Isa, Bahrain. Kuwait said drone attacks damaged three land border posts and an offshore oil drilling rig, injuring one worker. Jordan's military intercepted four missiles entering its airspace from Iranian territory. No American service members were hurt, CENTCOM said.

The last time the US and Iran traded strikes at this intensity was in late February, when the war began with US-Israeli strikes that killed then-Supreme Leader Ayatollah Ali Khamenei. His son and successor, Ayatollah Mojtaba Khamenei, vowed in his first statement since the funeral that revenge "is the will of our nation and must certainly be carried out." Two rounds of US strikes last week killed at least 17 people and wounded 115 others in Iran, according to Iranian Health Ministry spokesperson Hossein Kermanpour.

Key mediator Pakistan urged "all sides to exercise restraint" and uphold commitments made under last month's memorandum of understanding. Market pricing suggests a 23.5% probability of a full Iranian airspace closure by July 31, according to prediction-market data cited by Army Recognition.

This article is for informational purposes only and does not constitute investment advice.