• Brent crude surged $2 a barrel as futures extended gains after reports of vessel attacks near the Strait of Hormuz, reigniting supply fears.
  • The attacks underscore geopolitical risks at a key chokepoint, driving oil prices higher amid already tight global markets.
  • Equities and safe-haven assets also reacted, with investors pricing in potential disruption to crude flows.

Crude Spikes on Attack Reports

Brent crude futures jumped more than $2 a barrel on Thursday, extending earlier gains after reports emerged that vessels had been attacked near the strategic Strait of Hormuz. The move pushed Brent back toward $100 a barrel, as traders rushed to price in the risk of supply disruptions at one of the world's most vital oil transit chokepoints.

According to people familiar with the matter, at least two commercial vessels were targeted in the incident, prompting a response from naval forces in the region. The exact nature of the attacks and the extent of damage remained unclear, but the news immediately roiled energy markets. "Any threat to shipping in the Strait of Hormuz is taken extremely seriously," said a senior oil trader at a European trading house. "The market is on edge."

The spike in crude prices rippled across financial markets. Futures on the S&P 500 and Dow Jones Industrial Average extended gains, as energy stocks rallied on the back of higher oil prices. Meanwhile, safe-haven assets like gold and the US dollar also firmed, reflecting broader risk aversion.

Geopolitical Risk Lingers

The strait handles about a fifth of the world's oil consumption, making it a frequent flashpoint for geopolitical tension. Previous incidents, including attacks on tankers in 2019, have led to sharp but short-lived price spikes. The latest event comes as oil markets are already sensitive due to OPEC+ production cuts and strong demand.

Efforts to reach Iranian officials for comment were unsuccessful. The US Navy's Fifth Fleet, which patrols the region, said it was aware of the reports but declined to provide further details. A spokesman for the UK Maritime Trade Operations said it was investigating.

Some analysts warned that if the attacks are linked to broader regional tensions, the risk premium could persist. "The market is now pricing in a higher probability of disruption," said a geopolitical risk analyst at a London-based consultancy. "Without a de-escalation, we could see Brent hold above $100 for some time."

Broader Market Implications

The attacks also weighed on currencies, with commodity-linked currencies like the Norwegian krone and Canadian dollar gaining against the greenback. In bond markets, yields on US Treasuries edged lower as investors sought safety.

Shipping insurers are likely to hike premiums for vessels transiting the strait, adding to costs for oil refiners and traders. "This is the kind of event that reminds everyone how fragile global supply chains are," said a shipping broker based in Dubai.

Correction: An earlier version of this article misstated the number of vessels attacked. This has been updated to reflect the correct number.