Oil futures climbed on Thursday after President Trump labeled Iran’s reply to a U.S. cease‑fire proposal “unacceptable.” Traders now price a longer shutdown of the Strait of Hormuz, fearing heightened risk premiums. Ritterbusch & Associates warned that the widening gap between the sides raises escalation odds, which could keep the waterway closed beyond current expectations and could impact global shipping routes.

Saudi Arabia’s Red Sea shipments and occasional tanker transits have eased some pressure, yet analysts argue oil remains undervalued. WTI rose 1.5% to $96.81 a barrel, while Brent gained 1.9% to $103.19. The price lift reflects market bets on tighter supply and a larger risk premium than presently priced in. This pricing gap also fuels speculation that OPEC may consider output adjustments to stabilize the market.

Higher futures tighten profit calculations for refiners and raise input costs for petrochemical producers, prompting a reassessment of hedging strategies. Investors monitoring the Gulf corridor will watch for any diplomatic movement that could reopen the strait, as further escalation would likely push prices deeper into the $100 range. Current levels already squeeze margins across the energy overall value chain.