Oil prices climb after reported U.S. strikes in Iran

Oil prices rose about 2% in early trading on Thursday, May 28, after reports of fresh U.S. strikes on an Iranian military site raised concerns about supply risks linked to the Strait of Hormuz.

Brent crude futures gained $1.90, or 2.02%, to $96.19 a barrel by 0015 GMT. The more active August Brent contract rose $1.64, or 1.78%, to $93.89, while U.S. West Texas Intermediate futures advanced $1.73, or 1.95%, to $90.41.

The move reversed steep losses in the previous session, when both benchmarks slid more than 5% to a one-month low on expectations that a U.S.-Iran deal could end their three-month conflict and reopen the Strait of Hormuz.

Strikes add to risks around the Strait of Hormuz

A U.S. official said the U.S. military conducted strikes on a site that officials believed posed a threat to U.S. forces and commercial maritime traffic in the Strait of Hormuz.

The latest escalation kept geopolitical risk in focus for the oil market, where any disruption to shipping through the strait can quickly tighten supply expectations.

Inventory data in focus for U.S. demand signals

In the United States, crude oil stockpiles fell by 2.8 million barrels last week, marking a sixth consecutive weekly decline, according to data from the American Petroleum Institute.

Traders are expected to watch for official inventory figures from the U.S. Energy Information Administration due Thursday for additional signals on near-term demand and supply conditions.