Oil spiked after renewed attacks in the Persian Gulf and a fresh attempt by Washington to raise the pressure on Tehran with sanctions, as the US and Iran remained far apart on moves to reopen the Strait of Hormuz.Brent rose toward $98 a barrel, following a drop of more than 5% on Wednesday, while West Texas Intermediate was above $92. American forces carried out airstrikes on a military site and struck other targets near Hormuz, according to a US official. In response, the Islamic Revolutionary Guard Corps said it targeted the US base that launched the attack, Press TV reported in a post on X.Separately, Kuwaiti Air Defenses said they were responding to missile and drone threats, highlighting the fragility of the current ceasefire.The US Treasury sanctioned the Persian Gulf Strait Authority in a bid to prevent Tehran from profiting from vessels transiting the waterway by charging tolls, according to a statement. The entity “spearheads an Iranian-controlled scheme that flagrantly violates international law,” the Treasury said.Crude is still on pace for a second weekly drop on optimism that the warring parties will manage to conclude at least an interim deal, despite the challenges. Sticking points include the Islamic Republic’s nuclear program and Iran wanting to retain control over Hormuz, which remains subject to a double blockade by both Tehran and Washington. The conflict has choked off vital energy flows, with millions of barrels of daily oil supply shut-in across the region.“If the ceasefire is broken, the oil market faces resurging risks of further attacks on oil infrastructure juxtaposed against a weakened buffer on oil inventories,” said June Goh, senior oil market analyst at Sparta Commodities. The optimism that had surrounded an imminent deal has faded away, she said, citing the recent skirmishes reported by both the US and Iran, as well as the attack on Kuwait.On Wednesday, US president Donald Trump said he was “not satisfied” with talks on Hormuz, as the White House denied an Iranian report on a draft agreement that said Tehran and Oman would oversee the waterway. “The strait’s going to be open to everybody,” Trump said, adding the US will “watch over it”.Adding to challenges, Trump said at a White House meeting he wouldn’t agree to a bad deal and insisted the US would not ease sanctions, at odds with Tehran’s demand for an end to attacks and financial relief. The president also faces pressure from Republican hardliners to continue the war, which is now entering its fourth month after erupting at the end of February.While markets are pricing in the prospect of a deal “through a strong glass-half-full mindset,” the scope for the parties walking away from the negotiating table “remains a clear risk,” said Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne.In the US, an industry group flagged another drawdown in oil stockpiles. The American Petroleum Institute reported that nationwide crude holdings fell 2.8 million barrels last week, including a decline at the hub in Cushing, Oklahoma. Official data are due later Thursday.“The oil market is very complacent right now,” said Joe DeLaura, global energy strategist at Rabobank, noting that releases from strategic petroleum reserves, as well as sharply lower imports by China, were helping to cushion part of the loss of supply caused by the war.“By mid-July — if China starts importing again when the SPR releases end — we are in the hockey-stick-upward inflection point for so many refined products,” he said, describing a potential spike in prices.The failure to forge a deal to end the conflict is threatening to prolong the disruption to oil supplies, which has caused a steep jump in bond yields since late February by rekindling inflation. Central banks including the Federal Reserve are expected to eventually raise interest rates in response. - Bloomberg