US strike on Iran lifts WTI futures 3% in after-hours, Strait of Hormuz risk premium re-enters pricing

The strike follows documented Iranian proxy actions against US-linked shipping in the Gulf since October 2023. Primary records show US forces targeted IRGC naval assets rather than mainland infrastructure, limiting immediate escalation while signaling willingness to enforce freedom-of-navigation claims. Oil market data already reflect the shift: Brent-WTI spread widened 1.8% in after-hours as traders repriced a 5-10% probability of sustained Hormuz slowdowns.

Competing interests are straightforward. Washington gains deterrence credibility with Gulf partners and Israel at the cost of higher domestic energy prices and renewed congressional scrutiny on executive war powers. Tehran preserves regime cohesion by avoiding full retaliation yet retains the option to throttle exports through proxies, trading short-term revenue losses for longer-term leverage over Asian buyers.

The lens of price transmission to US drivers is direct. A sustained $5-8 risk premium on crude historically passes through to gasoline within 8-12 weeks via refinery margins, with EIA data showing 70% correlation between prompt futures and retail prices. If Hormuz loadings fall below 18 million barrels per day for more than 30 days, the threshold for measurable pump-price impact is crossed.

Next steps hinge on Iranian export volumes reported by tanker tracking firms and any follow-on US designation of additional entities under existing sanctions authorities.