Oil prices fall amid US-Iran conflict, giving back some of their recent gains on Thursday even as tensions in the Middle East continued to escalate, as oil shipments from the region continued to flow, according to Bloomberg HT. The war between the United States and Iran spreading beyond its main fronts has added to concerns in the markets, the report said.
Brent crude futures fell 1.42% to $89.45 a barrel, while US crude (WTI) declined 0.66% to trade at $83.90, according to Bloomberg HT. Brent had risen 7.91% in the previous session and WTI had gained 6.56%, marking one of the sharpest price spikes of the Iran war and reversing a roughly 5% drop seen on Tuesday following a temporary ceasefire in the five-month conflict.
According to preliminary data cited by Bloomberg HT, 39 commodity vessels crossed the Bab el-Mandeb Strait into the Red Sea on Tuesday, the highest level recorded since July 19, while the number of vessels passing through the Strait of Hormuz remained limited.
Tony Sycamore, a market analyst at IG, said in a note that although total shipping volumes had decreased, oil continued to leave the region through alternative channels, with new routes being developed. He said the longer this situation persists, the more alternative routes and methods would weaken Iran’s leverage over the Strait of Hormuz.
The Strait of Hormuz, the world’s most critical oil shipping chokepoint, had carried roughly one-fifth of global oil and natural gas flows before the war, according to Bloomberg HT. The strait has remained largely closed since the US-Iran war began in February, and diplomatic efforts to restore vessel transit through the waterway have not succeeded. Further background on the conflict’s impact on the waterway is available in earlier coverage of US-Iran strikes near the Strait of Hormuz.
A senior Iranian official said Iran had rejected a proposal from Oman for joint regional administration of the Strait of Hormuz, Bloomberg HT reported. Separately, the United States and Saudi Arabia reportedly carried out strikes on Wednesday against Iran-backed paramilitary forces in Iraq, marking the first time Saudi Arabia has publicly joined US airstrikes in the conflict. The strikes were described as retaliation for drone attacks launched from Iraq against Saudi oil facilities.
The renewed strikes came after US President Donald Trump had paused the bombing campaign over the weekend, citing depleted munitions stockpiles, according to Bloomberg HT. Iran said it had targeted US bases in Jordan and had struck three oil tankers that it said had passed through the Strait of Hormuz via what it described as an “unauthorized” route.
Sources said Saudi Arabia was working to build an international coalition to protect Red Sea shipping from attacks by the Houthis, Bloomberg HT reported. The Iran-backed Houthis had announced on July 20 that they would impose a naval blockade on Saudi Arabia in the Red Sea, expanding their attacks on oil tankers and opening a new front in the Iran war, with plans to target maritime traffic in the Bab el-Mandeb Strait, the world’s second most important oil shipping route.
No additional details on the specific timeline for restoring normal transit through the Strait of Hormuz were included in the available reporting on oil prices fall amid US-Iran conflict. For general reference on global oil supply and pricing data, unrelated to the specific developments described above, see the US Energy Information Administration.
The developments come amid a broader set of concurrent headlines from the region, according to Bloomberg HT’s coverage. Trump was separately quoted as saying the US would strike Iran very hard because “it’s our turn,” reflecting the administration’s stance following the resumption of hostilities. The US Federal Reserve, meanwhile, held interest rates steady for a fifth consecutive meeting, a decision Bloomberg HT noted alongside its broader market coverage of the period, though the report did not directly link the two developments.
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