Tensions between the United States and Iran intensified after U.S. forces struck two Iranian launchers on Larak Island in the Strait of Hormuz, prompting Iran to retaliate with attacks targeting U.S. military positions in Jordan.
The U.S. military said the strikes on Sunday targeted two launchers that Iranian Revolutionary Guard Corps personnel were preparing to use to fire rockets and deploy sea mines into the strategic waterway. The operation was the first known U.S. strike on Iranian territory since late July.
Iran's Revolutionary Guard subsequently said it had launched attacks against U.S. bases in Jordan. Jordanian authorities said missiles entering the country's airspace were intercepted, while reports indicated there was no major damage to the targeted U.S. facilities.
The confrontation also raised fresh concerns about Kharg Island, Iran's main oil export terminal. President Donald Trump said in a social media post that Kharg was being "blown to smithereens" and accompanied the claim with a video. Reuters reported, however, that the video was AI-generated and found no evidence confirming that the island had been attacked.
An Iranian official dismissed Trump's claim, while Iran's National Iranian Oil Company said operations at Kharg had not stopped.
The renewed military exchanges immediately affected energy markets because Larak Island sits in the Strait of Hormuz, a crucial route for global oil shipments.
Reuters reported that Brent crude rose more than 3% to around $90.97 a barrel, while U.S. West Texas Intermediate crude gained about 3.5% to $86.31 on Monday.
The increase reflects concerns that further military escalation could disrupt shipping or threaten energy supplies through the Strait of Hormuz.
For investors, the situation creates a potentially significant source of volatility. A prolonged disruption to the waterway could push oil prices higher, benefiting some energy producers while increasing fuel and transportation costs for businesses and adding to inflationary pressures.
The latest exchange also increases the risk that the conflict could spread beyond Iran and the United States, particularly as U.S. military facilities and regional allies become potential targets.
For now, however, the confirmed military action is the U.S. strike on Larak Island and Iran's subsequent retaliation. Claims that Kharg Island was destroyed should be treated cautiously because there is no verified evidence supporting that assertion.
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