U.S. oil prices top $80 after Iran reportedly attacks tanker in the Persian Gulf

By Myra P. Saefong and Nora Redmond

U.S. conflict with Iran continues to widen

Oil prices rose after a report Thursday that Iran struck a U.S. tanker in the Persian Gulf.

Oil rallied Thursday, with U.S. prices climbing above $80 a barrel for the first time in over a year, following a report that Iran attacked a U.S. oil tanker in the Persian Gulf, which raised concerns over the duration of Middle East disruptions to global supply chains.

Ongoing strikes across the region continue to threaten critical infrastructure and energy shipments, particularly by challenging commercial shipping through the Strait of Hormuz, said Alex Pierce, a commodity analyst at Schneider Electric.

While U.S.-led operations have aimed to reduce Iranian missile and drone inventories, he said Iran "remains a real and credible threat" to crude carriers and other marine traffic looking to transit through the crucial waterway.

In a statement Thursday, the Iranian Revolutionary Guard said it attacked a U.S. tanker in the northern part of the Gulf and that the vessel was on fire, according to a report from Reuters. That followed news from the Wall Street Journal on Sunday of an attack on a different oil tanker that was traveling through the Strait of Hormuz.

Read: Trump has a plan to open the Strait of Hormuz. Here are the obstacles it faces.

"Oil leaking into the water from a damaged cargo tank may ultimately prove more symbolic than catastrophic in volume terms, but symbolism matters in markets," Stephen Innes, managing partner at SPI Asset Management, said in a recent note.

'Oil is not just a commodity. It is a confidence asset. And confidence begins to fracture the moment traders see tankers themselves becoming targets.'Stephen Innes, SPI Asset Management

"Oil is not just a commodity. It is a confidence asset. And confidence begins to fracture the moment traders see tankers themselves becoming targets," he said.

The market is "slowly shifting from pricing-disruption risk to pricing-duration risk again," Innes said. "The difference is enormous. Disruption implies a temporary squeeze. Duration implies a structural premium embedded into the curve."

Read: Prices to charter large oil tankers soar as Strait of Hormuz traffic grinds to a halt

On Thursday, U.S. benchmark West Texas Intermediate crude (CL00) saw its April contract (CLJ26) climb by 8.5% to settle at $81.01 a barrel on the New York Mercantile Exchange. Prices last topped $80 back in January 2025, but that was the highest settlement level since July 2024, according to Dow Jones Market Data.

Global benchmark Brent for May delivery (BRNK26) (BRN00) tacked on 4.9% to $85.41 a barrel on ICE Futures Europe. It also settled at the highest since July 2024.

Israel announced on Thursday morning that it had started a "large-scale wave of strikes against infrastructure" in Tehran, Iran's capital city. The effective closure of the Strait of Hormuz, one of the most important maritime shipping routes in the world, has led to severe disruptions in global oil supplies.

Read: Here is the 'worst-case scenario' for oil and the Strait of Hormuz

Meanwhile, Bernard Yaros, lead U.S. economist at Oxford Economics, said that "a $10 increase in oil prices, if sustained, would add 28 cents to the retail price of regular-grade gasoline, subtract 0.1% from real [gross domestic product], and keep the Federal Reserve's preferred inflation gauge above 3% in 2026."

He added: "None of these likely negative spillover effects by themselves are enough to derail the current economic expansion."

Read: You'll likely pay a lot more for gas this spring because of the Iran conflict

Oil prices had briefly moved off their highs early Thursday after Sky News Arabia quoted Iran's deputy foreign minister as saying the country was willing to abandon its nuclear program in return for a lucrative U.S. offer, but it appears the report was referencing the official's stance at earlier talks in Geneva rather than a new posture since the conflict began.

-Myra P. Saefong -Nora Redmond

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03-05-26 1517ET