Oil Jumps 4% as US and Iran Exchange Strikes; Trump Says Washington Will Control Strait of Hormuz

Early on Monday, US Central Command announced that American forces had struck dozens of Iranian targets overnight, at multiple locations and with precision munitions. The stated aim was to degrade Iran's ability to keep attacking international shipping through the Strait of Hormuz. By the time trading was under way, the market had already responded.

Brent crude, the international benchmark, stood at $79.32 a barrel at 11:00 a.m. Eastern, up 4.36% from Friday's close after touching $79.71 earlier in the day. The jump followed a post from President Donald Trump saying Washington would likely take control of the strait. He wrote that the United States would now be known as the "Guardian of the Hormuz Strait" and, "as a matter of fairness," would be reimbursed at a rate of 20% on all cargo shipped, to cover the costs of providing security in the waterway.

Iranian media reported explosions across the country. An official in Isfahan province told state outlets that a strike on a military base killed one person and injured seven. Iran's Press TV reported that two water pumping stations were hit, one in the southwestern province of Khuzestan and one in the southern province of Bushehr. Iranian officials said those strikes killed one person, injured four, and temporarily disrupted the water supply to Kharg Island, the hub through which more than 90% of Iran's crude exports pass. Press TV said a US projectile at the pumping station in Mahshahr, in Khuzestan, killed one and wounded four.

Iran's Islamic Revolutionary Guard Corps said it was striking back at American bases in Bahrain, Jordan and Kuwait, along with radar systems in Oman. It claimed to have hit two US-linked air bases in Kuwait, army infrastructure and a drone command center in Bahrain, and Jordan's Prince Hassan Air Base. These are the IRGC's claims, as reported.

The escalation follows a declaration on Saturday, when the IRGC said the strait was closed to what it called unauthorized transit. It had fired a warning shot at a vessel it said was using an "unapproved" route, and said the strait would stay shut until US "interference" in the region ended.

The stakes are large. Since the US-Israel-Iran war began on Feb. 28, traffic through the strait has been nearly halted, first by IRGC attacks and later by an American blockade, disrupting flows of up to 14 million barrels a day, according to the International Energy Agency. Before the war, the waterway carried about a fifth of the world's oil and liquefied natural gas. Brent peaked near $115 in early May.

Prices eased in April after a fragile truce, then fell further on June 17, when the two sides reached an interim deal meant to end the conflict permanently and reopen the strait. Fighting resumed on July 7, sparked by three attacks on tankers in the strait and answered by a wave of US air strikes. Ships have again been steering clear, and oil has resumed climbing.

One point of dispute concerns Kharg Island. CENTCOM on Monday denied reports circulating on X that US forces had struck the island directly. Trump has repeatedly threatened to target it, most recently in a Truth Social post last week. Reuters reported last month several explosions there after a new round of US strikes, and in March the United States said it hit military targets on the island while deliberately avoiding oil export infrastructure.

What to watch next: whether the June interim deal can be revived, whether Kharg Island is struck directly, and how much commercial shipping returns to the strait.