Oil prices rose by more than one per cent on Thursday following a fresh wave of US military strikes against Iran. The renewed hostilities have severely dented hopes for an end to the conflict and threatened the full reopening of the strategic Strait of Hormuz, a critical maritime chokepoint that handled a fifth of global oil supplies prior to the war.

International benchmark Brent crude futures advanced by 86 cents, or 1.1pc, to settle at $78.88 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures gained 85 cents, or 1.2pc, to reach $74.37 a barrel.

Both benchmarks had already experienced a sharp upward push late on Wednesday after the US military commenced its aerial campaign, following warnings from US President Donald Trump.

Escalation breaks fragile ceasefire

The market reaction highlights growing anxiety among energy traders that the conflict will drag on. Analysts at ING noted that the latest escalation has thoroughly undermined confidence in what was already a highly fragile ceasefire, bringing geopolitical risk premiums back to the forefront of market calculations.

According to US Central Command, American forces struck approximately 90 Iranian military targets along the coastline.