Oil Prices Surge Toward $100 as Iran Closes Strait of Hormuz

Oil benchmarks surged toward the $100 per barrel threshold on Thursday, erasing previous gains as geopolitical tensions escalated between the United States and Iran. The price spike comes amid growing skepticism regarding a fragile two-week ceasefire announced by President Donald Trump late Tuesday. While markets initially reacted positively to the diplomatic overture—with major indices gaining between 2.5% and 3%—the stability of the agreement has been rapidly undermined. The optimism was short-lived as new developments suggested the ceasefire may be muddled and unsustainable. In a significant escalation, Iran has closed the Strait of Hormuz, citing retaliatory measures following attacks in Lebanon. This move targets one of the world's most critical oil transit chokepoints, immediately tightening the global supply outlook and adding a significant risk premium to crude futures. The shift in sentiment has triggered a reversal on Wall Street, where indices veered toward modest losses. Traders are now pricing in the possibility of a wider regional conflict, shifting away from the risk-on appetite seen earlier in the week.