Oil prices surged as tensions between the US and Iran escalated following a second consecutive day of military exchanges, reigniting concerns about a return to direct conflict. The Strait of Hormuz, a critical chokepoint through which roughly 20% of global oil passes, faces renewed transit risk that traders are pricing into energy markets. This geopolitical uncertainty is creating outsized volatility in oil futures and energy equities, with prices sensitive to any developments regarding military action or diplomatic de-escalation.

Market participants are closely monitoring whether the current tensions stabilize or evolve into sustained hostilities that could further disrupt regional supply chains. Any ceasefire announcements or additional military escalation could trigger sharp moves across energy markets, making near-term price direction highly dependent on diplomatic and military developments in the coming days. The situation highlights how geopolitical friction in the Middle East remains a structural driver of energy volatility and risk premium.