The oil market rose on Friday as tensions between the US and Iran increased, making traders cautious again. With this, oil markets reversed sharp losses recorded earlier this week, when prices had fallen on hopes of a diplomatic breakthrough between the two countries and the reopening of the Strait of Hormuz.West Texas Intermediate crude hit $96.66, or 1.95% higher, after posting an early gain of 3%. Brent crude was trading up $101.6, or 1.52%, by 7:05am IST.The increase came as the US military said on Thursday it had launched retaliatory strikes on Iranian targets linked to attacks on US forces. However, Iran accused Washington of violating the ceasefire, saying US forces targeted two ships in the Strait of Hormuz and attacked civilian areas.Just a few days ago, oil was moving rapidly in the opposite direction. Prices fell on Wednesday and global stock markets advanced amid hopes that the United States and Iran are moving closer to an arrangement that could allow crude oil shipments to resume through the Strait of Hormuz.Brent crude, which had been trading above $115 a barrel earlier in the week, fell 7.8% to $101.27. Prices briefly dropped below $97 before climbing again after President Donald Trump warned that he would bomb Iran at a “very high level and intensity” if it rejected his proposed deal.The situation in the Strait of Hormuz remains a major concern for the global economy. The war has effectively closed a vital route for oil tankers leaving the Middle East region, raising fears of supply disruptions and sustained inflation. A breakthrough reopening the route could help restore oil movement and ease broader price pressure.Along with geopolitical turmoil, there are also growing concerns over suspiciously timed market activity that aligns with oil price moments. According to Reuters, up to $7 billion was wagered on multiple exchanges, fuel products and derivatives during March and April ahead of major Iran policy announcements by US President Donald Trump.The scale is far greater than the previously reported $2.6 billion and already raises concerns about the potential misuse of sensitive information. Reuters reported in April that the U.S. Commodity Futures Trading Commission was investigating the trades, according to a person familiar with the matter, although the regulator has not publicly confirmed any formal investigation.Meanwhile, tensions in the Middle East continue to deepen after the US and Israel launched joint strikes on Iran on February 28. In response to the attack, Tehran has tightened its grip on the Strait of Hormuz, a vital oil pipeline that carries 20% of global energy supplies.