Global crude oil prices climbed by up to 1 per cent on Wednesday, 10 June, after the United States launched military strikes against Iranian air defence and surveillance radar sites near the Strait of Hormuz, stoking fears of a major disruption to energy supplies from one of the world's most critical maritime chokepoints. The move marked a sharp escalation in US-Iran tensions at a moment when markets had been pricing in a gradual de-escalation across West Asia.

Oil Price Movement

International benchmark Brent crude rose approximately 1 per cent to trade at $93.26 per barrel, while US West Texas Intermediate (WTI) crude gained 0.97 per cent to hover around $90 per barrel. The gains were underpinned by a combination of geopolitical risk premium and tightening supply fundamentals — US crude oil inventories reportedly fell for an eighth consecutive week, according to available data.

What Triggered the Strikes

According to the US Central Command, the operation was characterised as self-defence strikes carried out in response to the reported downing of a US Army Apache helicopter in the region. The targeted sites included Iranian air defence installations, ground control facilities, and surveillance radar positions near the strategically vital Strait of Hormuz. Iran, however, denied any responsibility for the helicopter incident, stating that the crash was accidental.

Broader Geopolitical Risk

This comes amid an already fragile regional security environment. Tehran has reportedly threatened to reopen hostilities should Israel persist in its military operations against Hezbollah in Lebanon — a warning that adds another layer of risk to energy supply routes through the Strait of Hormuz, through which an estimated 20 per cent of global oil trade passes. Notably, this is the latest in a series of confrontations that have periodically rattled energy markets over the past several years.

Global Market Fallout

Investor sentiment turned broadly risk-off in the wake of the strikes. Asian markets traded largely in the red, with Japan's Nikkei and Hong Kong's Hang Seng each falling more than 1 per cent, while South Korea's KOSPI plunged nearly 4 per cent. On Wall Street, the Nasdaq Composite declined 0.97 per cent and the S&P 500 slipped 0.26 per cent on Tuesday. Global equities faced selling pressure as traders reassessed risk exposure.

India's Markets Buck the Trend

In contrast, domestic equity markets in India traded higher during the morning session on Wednesday, with benchmark indices gaining up to 0.5 per cent in early trade — a divergence that analysts attributed to local buying interest. However, sustained crude price elevation poses an indirect risk to India, which imports over 85 per cent of its oil needs, as higher energy costs can widen the current account deficit and stoke domestic inflation.

With diplomatic channels between Washington and Tehran showing no immediate signs of reopening, energy traders are likely to keep a geopolitical risk premium baked into crude prices in the near term.