Oil Prices Edge Lower as Investors Weigh Uncertainty Over US-Iran Strikes

Oil prices edged lower on Thursday as investors assessed the risk that renewed U.S.-Iran strikes could disrupt crude supplies from the Middle East. Brent crude futures fell 43 cents, or 0.45%, to $95.20 a barrel at 0029 GMT. U.S. West Texas Intermediate futures dropped 24 cents, or 0.26%, to $90.77.

The benchmarks had moved sharply during the previous session, gaining as much as $2 a barrel before falling by as much as $1. Their session highs reached the highest levels since July 24. Prices later retreated after tentative signs that the latest escalation could be easing.

IG analyst Tony Sycamore said there had been no confirmed exchange of fire since around midday on Wednesday, Sydney time. U.S. President Donald Trump said the renewed U.S. campaign against Iran would not continue for “too long” and said U.S. forces had targeted Iranian radar and missile systems.

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We took out all of the new equipment that they tried to build along the Strait of Hormuz - some defensive, some offensive ... It was a very heavy attack last night, and we're prepared to do another one any time we want.

“We took out all of the new equipment that they tried to build along the Strait of Hormuz - some defensive, some offensive ... It was a very heavy attack last night, and we're prepared to do another one any time we want,” Trump said.

Sycamore said oil traffic through the strait could soon return to late-week levels if the easing continued, although he called that outcome uncertain. Preliminary Kpler data showed four commodity vessels transited the Strait of Hormuz on Wednesday, compared with a 10-day average of about 13. Iran also added more vessels to a list of ships it considers non-compliant and subject to fines, confiscation or detention if they attempt to cross. The United States said 17 million barrels of oil crossed the waterway on Monday, the highest volume since the war began.

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If that easing holds, and it is a big if, it won't be long before oil moving out of the Strait via dark-ship transits and ship-to-ship transfers returns to the levels we saw at the end of last week.