By: AGBI

Oil prices surged nearly 4 percent early on Thursday after the US attacked an Iranian military site late the previous day and Iran retaliated with strikes on an American airbase, despite a fragile ceasefire in place since April.

Brent crude futures were up 3.72 percent at $97.80 a barrel by 03:44 GMT, while US West Texas Intermediate futures rose 3.73 percent to $91.99.

The benchmarks fell more than 5 percent in the previous session to their lowest in a month amid speculation of a US-Iran peace deal and a reopening of the Strait of Hormuz.

The US military launched strikes in Iran targeting a military site that officials said posed a threat to US forces and commercial maritime traffic in the strait.

Iran’s Tasnim news agency confirmed the Islamic Revolutionary Guard Corps targeted an American airbase following US strikes on a location near Bandar Abbas airport.

No details were provided on the location of the airbase, but the state-run Kuwait News Agency (Kuna) reported that Kuwaiti air defences had repelled drone and missile attacks in the early morning.

Meanwhile, the American Petroleum Institute said US crude oil stockpiles declined by 2.8 million barrels last week, marking the sixth straight weekly fall.

Official inventory data from the US Energy Information Administration will be released on Thursday.