• Oil prices have recently surged above $97 amid escalating US-Iran military tensions.
• Brent crude fluctuated between gains and losses, settling at around $95 per barrel.
• The Strait of Hormuz, crucial for oil transit, remains a focal point of conflict affecting supply.
• US airstrikes and Iranian retaliatory actions are leading to increased market volatility.
• Shipping activity through the Strait has significantly decreased due to ongoing hostilities.

Oil prices have seen significant fluctuations recently, with Brent crude reaching as high as $97 a barrel as the conflict between the US and Iran escalates. This recent surge emerged following overnight airstrikes by the US against Iranian targets, which prompted retaliatory strikes from Tehran. The US Central Command reported these decisions were reactions to attempted attacks by Iran's forces, specifically in the strategically important Strait of Hormuz, a vital transit route for about one-fifth of the world's oil consumption, according to Indiatimes and SCMP.

The volatility in oil prices has continued, with both Brent and West Texas Intermediate (WTI) crude fluctuating throughout trading sessions. On Thursday, Brent crude fell by 43 cents to settle at $95.20 a barrel, while WTI decreased by 24 cents to $90.77 per barrel. This followed a period where pricing had surged, noted as the highest since July, reflecting the uncertainty stemming from the heightened military tensions in the region, as reported by Reuters and Indiatimes.

Key factors affecting the market include the substantial reduction in shipping traffic through the Strait of Hormuz, which has seen activity levels drop dramatically. Only four vessels transited the strait recently, compared to a 10-day average of around 13 vessels. This drought of shipping activity is linked directly to the ongoing military operations between the two nations, leading to greater concerns about oil supply disruptions, according to Reuters and SCMP.

While President Trump mentioned that the US military campaign against Iran would not prolong indefinitely, ongoing aggressive actions on both sides continue to sustain market apprehension. Analysts have observed that these geopolitical tensions will likely keep oil prices bolstered in the short term, complicating the global oil supply landscape amid looming inflation pressures, highlighted by Indiatimes and SCMP.