Oil prices rise as US and Iran exchange fresh airstrikes, with global strategic reserve releases set to plummet

The US and Iran traded a fresh round of airstrikes Thursday, reversing earlier signals that negotiators were making progress toward a ceasefire. Washington and Tehran are now deeply divided over potential future rules of transit through the Strait of Hormuz.

Morgan Stanley analysts warned that conditions in the global oil market are set to worsen in the next few weeks, as the rate of releases from global strategic reserves plummets to less than a third of current levels.

Insurance rates for tankers passing the Strait of Hormuz—the most important indicator of whether the waterway is "reopening"—have not budged, according to Dylan Mortimer of the brokerage firm Marsh. Meaningful change in insurance conditions would likely require a sustained de-escalation in regional tensions and clearer security assurances for merchant shipping.