Oil prices climbed as U.S. and Iranian forces traded strikes, including an attack on a tanker in the Strait of Hormuz and retaliatory strikes on bases in Jordan.

Oil prices rose on Tuesday following a surge in military tensions between the U.S. and Iran. The escalation included a strike on a tanker in the Strait of Hormuz on Monday and Iranian attacks on two American bases in Jordan, marking the first direct exchange of fire between the two nations in over a month.

Military Escalation in the Strait

On Sunday, U.S. forces targeted two Iranian rocket launchers on Larak Island, an action reportedly resulting in three deaths. The U.S. stated the strike was intended to prevent the launch of sea mines into the Strait of Hormuz. In retaliation, Iran attacked two American bases in Jordan on Monday. Additionally, the UK Maritime Trade Operations agency reported that a tanker was struck by three unknown projectiles while transiting the Strait of Hormuz on Monday near the Omani coast; no casualties were reported.

Diplomatic and Economic Tensions

Iranian President Masoud Pezeshkian stated at the Shanghai Cooperation Organisation Summit that Tehran would reciprocate if Washington returned to commitments made in a June interim deal. Meanwhile, U.S. President Donald Trump vowed to respond to the attacks on American bases, stating, "We are going to hit them hard." U.S. Treasury Secretary Scott Bessent attributed Iran's recent military actions to the impact of new secondary sanctions on the Iranian economy.