Oil prices jumped Monday after reports circulated that a U.S. warship had come under attack in the Strait of Hormuz. But U.S. Central Command quickly denied the claim, saying no Iranian missiles struck any American vessel.
What sparked the rally
West Texas Intermediate and Brent crude futures both surged in early trading following unverified reports that an Iranian Revolutionary Guard Corps missile had hit a U.S. Navy ship in the narrow waterway. Traders reacted to the news by buying up contracts, betting on a potential supply disruption from one of the world's most critical oil chokepoints.
CENTCOM pushes back
U.S. Central Command issued a statement flatly denying the reports. It said no IRGC missile struck a U.S. ship in the Strait of Hormuz. The denial did not immediately reverse all the price gains, leaving the market to weigh the credibility of the original reports against the official U.S. account.
Market remains on edge
While CENTCOM's statement may calm some nerves, the initial spike shows how quickly the market can react to any sign of conflict in the region. The Strait of Hormuz carries about a fifth of the world's oil supply, and even a false alarm can move prices. As of late morning, WTI and Brent remained higher than their previous close, though off their session highs.
Investors are now watching for any further statements from CENTCOM or other U.S. officials that could either reinforce the denial or provide new details about the incident that sparked the rally. No additional reports have surfaced so far.
