Oil prices climbed more than 3% on Wednesday after renewed military exchanges between the United States and Iran heightened concerns over global energy supplies and the security of shipping through the Strait of Hormuz.

Renewed Tensions Fuel Market Gains

Crude prices reached their highest levels in two weeks after U.S. forces launched strikes on Iranian military sites in response to attacks on commercial vessels in the Strait of Hormuz. Iran later said it targeted U.S. military facilities in Bahrain and Kuwait, raising fears of further escalation.

The renewed conflict has also cast doubt over ongoing negotiations aimed at restoring stability and fully reopening the strategic waterway.

Strait of Hormuz Remains at the Center of Dispute

The latest escalation follows disagreements over shipping through the Strait of Hormuz. Iran insists on imposing transit fees on vessels using the route, while the United States opposes the proposal.

Security analyst Andreas Krieg said Tehran is signaling that it will not accept alternative arrangements for maritime traffic through the strait.

Markets React to Geopolitical Risks

The renewed tensions weighed on global financial markets, particularly in Asia, while investors shifted their focus from technology stocks to geopolitical risks.

Meanwhile, the U.S. dollar strengthened as concerns over potential supply disruptions raised expectations that higher energy prices could keep inflation elevated.