Escalating military actions between the United States and Iran have placed a fragile ceasefire under significant strain, threatening to prolong the Middle East conflict that has been unsettling global markets and triggering a sharp rise in crude oil prices.

Following a gain of over 2% in the previous session, West Texas Intermediate (WTI) crude surged as much as 2.7% to $92.45 per barrel during trading. Brent crude settled near the $93 mark. This movement came after U.S. military forces, for a second consecutive day, conducted strikes on what they described as "multiple" targets, following accusations from former President Trump that Iran was stalling mid-term peace negotiations. Iran has vowed firm resistance to any threats.

In a significant development, Iran's Khatam al-Anbiya Central Headquarters announced early on the 11th that, citing the volatile security situation in the region, the Strait of Hormuz would be closed to all vessels, including oil tankers and commercial ships, effective immediately. Any ship attempting to pass through the strategic waterway would face attack. The closure of this critical chokepoint since the conflict's outbreak in late February has already severely disrupted the flow of crude oil, fuel, and natural gas supplies.

Jorge Leon, Rystad Energy's Head of Geopolitical Analysis, commented on the situation, stating, "The coming days will be crucial in determining whether diplomatic efforts can regain traction or if the conflict moves into a more sustained cycle of escalation. Until there is clearer evidence that a ceasefire will hold, price volatility is likely to remain elevated."

The U.S. Central Command stated its recent actions were "additional defensive strikes" in response to what it called Iran's "unprovoked and continued aggression." These strikes followed Iran's retaliatory actions against U.S. military facilities in Bahrain, Jordan, and Kuwait, which were themselves a response to earlier U.S. attacks prompted by a downed helicopter.

In a social media post later on Wednesday, former President Trump claimed U.S. forces had escorted "over 200 commercial ships" through the Strait of Hormuz, allowing "more than 100 million barrels of oil" to reach the market. He further asserted that control of the strait lies with the United States, "not Iran."

While a limited amount of oil has reportedly moved out of the Persian Gulf under cover of darkness and spot markets show some signs of adequate supply, the broader logistical disruptions in the Middle East continue to exert upward pressure on energy prices—including U.S. gasoline—and fuel concerns about slowing economic growth.

Adding to the supply-side pressure, U.S. government data released Wednesday showed domestic crude inventories fell by 7.2 million barrels last week, marking a seventh consecutive weekly drawdown. Supplies at the Cushing, Oklahoma, hub also saw a slight decline.

Gold Faces Sustained Selling Pressure

Meanwhile, gold prices opened lower for a third consecutive day. The potential for a prolonged conflict, which has disrupted global markets and stoked inflation fears, is weighing on the precious metal.

Spot gold fell as much as 0.9% in early trading to around $4,036 per ounce, building on a 4.4% decline from the previous session. The latest strikes highlight a growing impatience from the former U.S. administration over the stalled peace process. The now four-month-long war has disrupted energy flows via the Strait of Hormuz, driven up oil prices, and increased the likelihood of further interest rate hikes as central banks attempt to combat inflation.

Data from the U.S. Bureau of Labor Statistics on Wednesday showed the war's impact on energy costs pushed U.S. inflation in May to its fastest annual pace in over three years, outpacing wage growth for Americans. The Consumer Price Index (CPI) rose 0.5% from April and 4.2% from a year ago, marking the largest annual increase since early 2023.

Gold is currently trading more than one-fifth below its price level from before the Iran conflict erupted in late February. A recent breach below the 200-day moving average—a widely watched long-term trend indicator—triggered additional selling pressure as institutional investors view this level as a key technical threshold.

At the time of writing, spot gold was down 0.9% at $4,036.66 per ounce. Spot silver fell 1.4% to $62.46 per ounce. Platinum and palladium prices also moved lower.