Oil Markets Whipsaw as U.S.-Iran Tensions Flare in Strait of Hormuz

The U.S. and Iran exchanged fire in the Strait of Hormuz on Thursday, with each side claiming the other initiated the attack , sending oil prices climbing and raising fresh doubts about the durability of a month-old ceasefire that has done little to reopen the world's most critical energy chokepoint.

Brent crude rose to $101.65 per barrel on May 8, up 1.59% from the previous day , according to Trading Economics. Oil prices rose Friday after the U.S. and Iran exchanged fire in the Strait of Hormuz , CNBC reported. The spike came despite President Donald Trump insisting in a call with an ABC News reporter that the ceasefire remains in effect, saying the strikes are "just a love tap" .

The U.S. and Iran opened fire in the Strait of Hormuz, with the renewal of hostilities further imperiling the two countries' ceasefire agreement, which had already been badly damaged by repeated accusations that its terms are being breached , CNBC reported. CENTCOM said the USS Truxtun, the USS Rafael Peralta and the USS Mason were transiting the strait on Thursday when Iranian forces "launched multiple missiles, drones and small boats" , according to ABC News.

Shell Profits Jump on War-Driven Price Surge

Oil giant Shell posted bumper profit of $6.92 billion through the first quarter as the Iran war sent fossil fuel prices soaring , CNBC reported Thursday. Adjusted earnings rose to $6.9 billion in the first quarter of 2026, up 24% from $5.6 billion a year earlier , according to Euronews.

Europe's biggest energy company reported a jump in first-quarter profits as the war involving Iran and the effective closure of the Strait of Hormuz pushed oil and gas prices higher , Euronews reported. However, the Financial Times noted that Shell signaled that gas production in Qatar is expected to fall by at least 30% in the second quarter compared with the first three months of 2026 due to conflict-related damage to its facilities.

The war has damaged assets, roiled energy markets and choked off energy flows through the Strait of Hormuz and caused sharp price swings. Brent oil prices have increased more than 50% since the conflict began at the end of February , according to Transport Topics.

Nvidia Bets Billions on AI Infrastructure Buildout

In a sign of artificial intelligence's surging energy demands, Nvidia and IREN Limited announced a strategic partnership to accelerate deployment of next-generation AI infrastructure, with the companies intending to support deployment of up to 5 gigawatts of Nvidia DSX-aligned AI infrastructure across IREN's global data center pipeline over time , according to Nvidia's official announcement.

As part of the partnership, IREN issued to Nvidia a five-year right to purchase up to 30 million shares of ordinary stock at an exercise price of $70 per share, resulting in a right to invest up to $2.1 billion, subject to certain conditions including regulatory , the company said. In a separate release, IREN said it signed a five-year deal worth $3.4 billion to provide Nvidia with access to managed GPU cloud services "for its internal AI and research workloads" , CNBC reported.

The partnership underscores how the AI boom is reshaping energy infrastructure demands. Although IREN previously specialized in data centers that were tailored for bitcoin mining, it's been increasingly providing AI-related infrastructure services as part of the AI boom. In November 2025, IREN and Microsoft inked a multi-year $9.7 billion deal "to deliver GPU cloud infrastructure powered by Nvidia GB300 GPUs" at its Texas data center, CNBC noted.

Venezuela Oil Exports Surge Under U.S. Management

While Middle East supplies remain constrained, Venezuela has emerged as an unexpected bright spot for global oil markets. According to OilPrice.com, April exports soared to 1.16 million barrels a day, a seven-year high and doubling levels seen at the end of last year, according to shipping reports and vessel movements tracked by Bloomberg .

The U.S. took control of Venezuela's oil exports shortly after U.S. forces captured President Nicolas Maduro in early January, with proceeds going to a U.S.-supervised fund in Qatar. Since then, trading houses Vitol and Trafigura have been marketing and trading the lion's share of the OPEC country's oil under the pact, while partners of Venezuela's state oil company PDVSA, particularly Chevron, are boosting output and shipments , Energy Now reported.

The resurgence has attracted major international players. Agreements signed this week with U.S. firms Hunt Overseas and Crossover Energy are targeting the Orinoco Belt, Venezuela's primary heavy crude region. European majors, including Eni, Repsol, and BP, are either expanding or evaluating their positions, while ExxonMobil and ConocoPhillips have deployed teams to assess opportunities , according to Oil & Gas Advancement.

Markets Navigate Geopolitical Uncertainty

"The risk of a proposed U.S. peace deal breaking down will likely keep oil markets volatile," said ANZ Research's experts , CNBC reported. The IEA warned that the war was disrupting roughly 14 million barrels per day of global oil supply and noted that any post-conflict production recovery would likely proceed gradually , according to Trading Economics.

Despite the oil price shock, the attacks highlighted the fragility of the ceasefire in the area around the Strait of Hormuz, which 20% of the world's oil used to pass through before the U.S. and Israel attacked Iran on Feb. 28. No ships transited the strait Thursday, the second day in a row that the critical waterway has had no traffic at all, according to S&P Global Market Intelligence , NBC News reported.

According to market data, WTI Crude traded at $71.50 per barrel on May 8, up 0.6%, while Brent Crude stood at $75.20 per barrel, up 0.5%. Henry Hub Natural Gas fell 2.4% to $3.25 per MMBtu. The divergence between these figures and the higher prices reported in early Asian trading reflects the extreme volatility gripping energy markets as traders assess whether diplomatic efforts can prevent a full resumption of hostilities.