The volatility followed Tuesday’s Iranian strikes on three commercial vessels, including an oil tanker and an LNG carrier. The United States responded overnight with targeted attacks on Iranian air defense systems, coastal radar, and anti-ship missile sites. Iran countered by hitting U.S. military bases in Bahrain and Kuwait, effectively ending the memorandum of understanding signed just last month. President Donald Trump declared the ceasefire void, subsequently revoking temporary sanctions waivers that had permitted Iran to export oil and petrochemicals.

Analysts at ING, including Warren Patterson and Ewa Manthey, noted that market participants had been far too bullish on the speed of regional supply recovery. Tanker traffic through the Strait of Hormuz effectively halted by Wednesday as operators prioritized safety over logistics. With the security situation deteriorating, the prospect of a flood of new oil reaching global markets has evaporated, forcing a wholesale re-evaluation of energy risk premiums.