• Brent crude jumped 6.3% to $78.86 a barrel, while WTI gained 5.9% to $74.60.
  • President Trump said the Iran cease-fire was over, escalating risks around the Strait of Hormuz.
  • Markets are pricing in potential supply disruptions from the key chokepoint.

Crude Rally Intensifies

Oil prices spiked on Thursday after President Trump declared the Iran cease-fire was effectively dead, reigniting fears of supply disruptions through the Strait of Hormuz. Brent crude surged 6.3% to settle at $78.86 a barrel, while West Texas Intermediate jumped 5.9% to $74.60, marking the biggest single-day gain in months.

The move came after Trump told reporters that the cease-fire was "on life support" following U.S. strikes and attacks on commercial vessels near the strategic waterway. According to people familiar with the matter, the administration is considering further military actions to secure shipping lanes, though no final decision has been made.

Strait of Hormuz in Focus

The Strait of Hormuz, a narrow passage between the Persian Gulf and the Gulf of Oman, handles about 20% of global oil consumption. Any perceived threat to its operation typically sends prices higher. "The market is pricing in a significant risk premium," said a senior energy analyst at a major investment bank. "Without a de-escalation, we could see sustained pressure on prices."

Iranian officials have signaled they could restrict passage in response to the strikes, though they have not yet acted. The standoff echoes past crises, including the 2019 attacks on Saudi Aramco facilities, which briefly knocked out 5% of global supply.

Broader Implications

The rally has ripple effects beyond energy markets. Higher oil prices risk stoking inflation, potentially complicating central bank policy. For consumers, gasoline prices could rise in the coming weeks, adding to household costs. Meanwhile, shipping and insurance costs are already climbing, with war risk premiums for vessels transiting the region doubling overnight.

Efforts to reach the White House for comment were unsuccessful. The State Department declined to confirm specifics but reiterated its commitment to "freedom of navigation."

Correction: An earlier version of this article misstated the closing price for Brent crude. It has been updated to reflect the correct figure of $78.86.