US-Iran war: Oil prices pared some of their recent gains on Thursday as crude shipments from the Middle East continued despite escalating geopolitical tensions and the widening conflict between the United States and Iran.
Brent crude futures declined 79 cents, or 0.9%, to $87.30 per barrel, while US West Texas Intermediate (WTI) crude fell 76 cents, or 0.9%, to $83.70 per barrel.
The pullback came after a sharp rally in the previous session, when Brent surged 7.91% and WTI climbed 6.56%, marking one of the biggest gains since the outbreak of the US-Iran conflict. The rebound had followed a nearly 5% drop on Tuesday after a temporary lull in hostilities.
What’s driving the crude oil prices today?
US President Donald Trump was quoted as saying by Fox News that Iran would face a strong response if American forces in Jordan were attacked. The conflict appears likely to continue for months, with both sides remaining deadlocked over control of the Strait of Hormuz and unable to reach a ceasefire, according to several current and former officials from the US, Iran, and Europe.
In the United States, commercial crude oil inventories recorded their sharpest decline since mid-June, highlighting a tightening physical market after prolonged tensions in the Middle East. At the same time, crude holdings in the Strategic Petroleum Reserve fell for the 18th straight week, reaching their lowest level since 1983.
Iran has rejected Oman’s proposal for joint regional management of the Strait of Hormuz, according to a senior Iranian official on Wednesday.
Meanwhile, the United States and Saudi Arabia carried out air strikes on Iran-backed paramilitary groups in Iraq, marking Saudi Arabia’s first publicly acknowledged participation in US-led strikes. The action came in response to drone attacks on Saudi oil facilities that were reportedly launched from Iraq.
The strikes also marked the resumption of US military operations in the Middle East after President Donald Trump had halted a bombing campaign over the weekend due to dwindling ammunition supplies.
Separately, Iran claimed it had targeted US military bases in Jordan and attacked three tankers passing through the Strait of Hormuz, alleging they were using an unauthorised shipping route.
(With inputs from agencies)
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