Iran's Islamic Revolutionary Guard Corps struck American installations in Qatar and Jordan on Thursday, the first time this round of escalation has reached those two countries. Jordan said it shot down eight incoming missiles. President Trump, who declared the ceasefire over at the NATO summit in Ankara, has not ruled out further strikes on Iran's Kharg Island export terminal. Former Supreme Leader Ali Khamenei, killed at the war's outset on February 28, was laid to rest in Mashhad early Friday, concluding the funeral proceedings that had paused most diplomatic contact between Washington and Tehran.
Why Oil Fell While the War Widened
WTI crude slipped below $73 a barrel Thursday, easing for a second straight day even as the strikes expanded to two new countries. The Institute for the Study of War and the Critical Threats Project argued this week that the renewed U.S. strikes do not appear to be changing Iran's underlying strategy in the Strait of Hormuz, which centres on pressuring Gulf states into accepting Iranian terms for managing the waterway rather than contesting the strait through force alone. Vessel tracking data cited by Reuters showed a decline in Hormuz transits since the ceasefire collapsed, with most visible traffic now moving along Iran-approved routes and only limited activity on the U.S.-backed Omani corridor. Substantial volumes of crude continued moving through the strait before the collapse, with some shipments only appearing in tracking data days later because of disabled signals, which means the actual disruption is smaller than the headline count of countries struck this week would suggest.
The Tail Risk Is Not the Country Count. It Is the Strait Itself.
The base case, reflected in this week's muted oil price action, is that the conflict continues to widen rhetorically and militarily without a sustained closure of Hormuz shipping. That base case is consistent with the price history of the war to date: WTI spiked to an intraday high of $115.78 on March 9, when Gulf states shut in production and shipping traffic genuinely stopped moving through the strait, then pulled back to $76.10 within 24 hours once that specific disruption eased. The tail risk this week is narrower and more specific than "the war gets bigger." It is a return to the March conditions, a genuine multi-week halt in tanker transits, rather than a rhetorical escalation to additional countries that does not change what is actually moving through the water.
The Wall Street Journal's Thursday report that Israeli intelligence flagged a fresh Iranian plot against President Trump adds a different kind of tail risk, one that operates through political rather than logistical channels. A successful or attempted strike against a sitting U.S. president would be a discontinuous shock with no clean precedent in the current price data, and it is not the scenario the oil market is currently pricing.
What This Means for Canadian Energy Exposure
TSX energy names rallied Thursday even as oil eased, with Methanex, Enerflex, Headwater Exploration, and Cenovus Energy each gaining more than 5.4% on the session, a divergence explained more by the TSX's own sector rotation into gold miners and financials than by the crude tape itself. The mechanical read for Canadian energy portfolios is that WTI's current range, roughly $69 to $74 over the past two weeks, reflects a market pricing continued but contained disruption. A break back above the $90 to $100 range this war touched in April and May would require the kind of sustained transit halt the ISW and CTP say has not yet materialised, not simply a wider list of countries drawn into the exchange of strikes.
WTI touched an intraday high of $115.78 on March 9 before pulling back to $76.10 the very next day, a single-day round trip larger than this week's entire move. Points are anchored to specific reported dates rather than a continuous daily series.