Oil prices rose sharply on Tuesday as the U.S. military launched fresh airstrikes against Iran, putting Houston’s energy industry on high alert. U.S. West Texas Intermediate futures climbed 1.5% to close at $79.34 per barrel, while Brent crude, the international benchmark, gained 1.72% to settle at $84.73 per barrel.
The U.S. Central Command confirmed that strikes against Iran resumed as part of a naval blockade reimposed at 4 p.m. ET on Tuesday. The military action marks the third consecutive night of operations aimed at degrading Iran’s ability to attack commercial shipping in the Strait of Hormuz, through which roughly one-fifth of global oil supplies traditionally flow.
For Houston, the energy capital of the United States, the escalation carries significant implications. Major oil companies and energy trading firms headquartered in the metropolitan area are closely monitoring the situation, as disruption to Hormuz traffic directly affects pricing and supply chains. The U.S. Energy Department reported that 8.5 million barrels of oil transited the strait on Sunday despite the hostilities, though ship tracking firms have observed a steep decline in overall traffic.
President Donald Trump abandoned his proposed 20% protection fee on cargo transiting the Strait of Hormuz, saying Gulf states would invest in the U.S. as repayment instead. The International Maritime Organization had said mandatory tolls in the strait are illegal, and the shipping industry largely opposed the fee.
The price swings come after oil costs fell roughly 25% in June, contributing to a broader easing of inflation. The consumer price index fell 0.4% in June, bringing annual inflation to 3.5%, below economist expectations. However, analysts warn that renewed conflict with Iran could reverse those gains. “The longer the conflict drags on, the higher the probability that the Fed will have to hike,” said Ryan Weldon, investment director at IFM Investors.
Iran’s Revolutionary Guard reported attacks on two supertankers transiting Hormuz with transponders turned off. The UAE’s state oil company ADNOC confirmed two of its tankers were hit by projectiles, killing one mariner and injuring several others. Houston-based energy firms with exposure to Middle East shipping routes are assessing operational risks as the situation develops.
