Noida, July 16 (APAC Media): Brent and WTI crude oil futures eased on Thursday, bringing a three-session rally to an end, as investors assessed the fallout from ongoing U.S. military operations against Iran while remaining alert to the risk of prolonged disruptions to crude exports through the strategically vital Strait of Hormuz.
In addition, Brent crude futures for September delivery fell 0.4% to $84.48 a barrel, while U.S. West Texas Intermediate (WTI) crude futures slipped 0.3% to $79.36 a barrel.
Both benchmarks had surged nearly 10% to one-month highs at the start of the week after renewed tensions in the Iran conflict fuelled concerns over potential supply disruptions.
Speaking to reporters on Wednesday, U.S. President Donald Trump said Iran had reached out seeking a meeting, adding that “they always want to meet,” although there has been no public evidence to support the claim.
Asked by a reporter whether his conclusion that negotiations with Iran’s Islamic Revolutionary Guard Corps (IRGC) were no longer possible meant he might “wipe them out like you did ISIS,” Trump did not directly answer the question.
Markets remained focused on the security of the Strait of Hormuz, a critical shipping route that typically handles about one-fifth of global oil and liquefied natural gas shipments.
The latest gains in oil prices came after a new wave of U.S. strikes on Wednesday targeting Iranian military facilities linked to attacks on commercial vessels.
Market sentiment remained cautious after developments involving the United States and Iran intensified fears that the conflict could spread across the region.
Investors are closely monitoring the situation around the Strait of Hormuz, a crucial global oil shipping route, where any disruption could significantly impact international energy markets.
Washington said the operation was intended to reduce Iran’s ability to threaten maritime traffic in the Gulf, while Tehran described the conflict as an “existential war” with the United States and warned that regional energy exports could face further disruptions if hostilities persist.
The renewed escalation has erased much of the optimism that followed a temporary easing of tensions last month.
Analysts warned that the risk of renewed oil supply disruptions had increased as the market entered the period with significantly lower inventories following heavy drawdowns in the second quarter, leaving it more exposed to potential shocks.
“Additionally, global SPR releases, which have provided support to the market in recent months, are expected to come to an end within the next few weeks,” analysts added.
Jefferies analysts said they expect the current escalation phase to continue for several weeks, even without a transition into a full-scale war, which could keep shipping activity through the Strait of Hormuz disrupted and sustain upward pressure on oil prices.
Providing additional support for prices, the U.S. Energy Information Administration said on Wednesday that crude oil inventories dropped by 1.7 million barrels in the week ended July 10, broadly matching market expectations.
“Market participants are turning to buying as renewed tensions in the Middle East heighten concerns over potential supply disruptions,” Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, told a news agency.
He said that while a large-scale escalation was not the most likely scenario at present, any further deterioration in the situation could push crude oil prices higher.
India and other emerging economies, which rely heavily on imported crude, could face additional challenges if prices remain elevated for a prolonged period. Higher energy costs may affect fuel prices, business expenses, and broader economic growth.
Oil markets are expected to remain volatile in the coming sessions as investors weigh geopolitical risks against supply-demand fundamentals.
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Disclaimer: This article is for informational purposes only. APAC Media is not liable for any investment decisions or losses. Please conduct your own research or consult a financial advisor before investing.
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