Global oil prices moved lower on Thursday as investors evaluated the consequences of renewed US military action against Iran, with uncertainty over the Strait of Hormuz continuing to influence the energy market.
Brent crude futures fell by $1.03, or 1.32 per cent, to $76.99 a barrel during early trading.
US West Texas Intermediate (WTI) crude also declined, dropping 88 cents, or 1.2 per cent, to $72.64 a barrel. The retreat followed strong gains in the previous session, when both benchmarks reached their highest levels since 22 June.
Oil prices had climbed after the United States launched fresh strikes on Iranian targets late on Wednesday.
The military action was followed by reported Iranian attacks on Kuwait and Bahrain, adding to concerns that efforts to end the conflict could face further setbacks.
The US stated, “The strikes were carried out in response to an attack on three cargo vessels in the Strait of Hormuz on Tuesday.”
The military action came shortly after US President Donald Trump declared that an interim ceasefire with Iran was no longer in effect.
Despite the latest escalation, traders remained cautious rather than pushing prices significantly higher. Market analysts said, “Investors were closely monitoring developments around the Strait of Hormuz, a critical route for global energy exports.”
Tim Waterer, chief market analyst at KCM Trade, said, “Uncertainty over future oil shipments through the waterway was prompting traders to reassess market conditions.”
He noted that expectations of possible diplomatic progress were helping to limit further gains in oil prices.
President Trump later said, “Iran had contacted the United States and expressed a willingness to negotiate, offering some hope that tensions could eventually ease.”
Shipping companies are also facing growing uncertainty.
According to insurance industry sources, some marine insurers have advised vessels to delay journeys through the Strait of Hormuz, while others are reviewing their risk policies after recent attacks on commercial ships raised security concerns.
Before the latest military developments, oil prices had been moving lower as markets anticipated increased crude supplies following an earlier truce in the region and signs of rising global inventories.
The Strait of Hormuz remains one of the world’s most important energy corridors.
Before the conflict intensified, around one-fifth of global oil and liquefied natural gas supplies passed through the narrow waterway. Any disruption to shipping in the area has the potential to affect international energy markets and fuel prices.
Analysts at Goldman Sachs said, “The outlook for oil prices remained balanced. The bank expects Gulf oil exports to recover by the end of July if diplomatic negotiations resume, sanctions relief allows Iranian exports to increase, and shipping companies receive stronger security guarantees.”
Under that scenario, oil flows through the Strait of Hormuz could rise by around 6.6 million barrels per day.
However, the bank also warned that unsuccessful negotiations, further attacks on oil tankers or tighter restrictions on Iranian exports could lead to additional supply disruptions and renewed price volatility.
Aneeka Gupta, Director of Macroeconomic Research at WisdomTree, said, “Brent crude is likely to trade between $75 and $85 per barrel over the coming month, with a slight upward trend.”
She also said, “The recovery in global oil supplies was progressing but remained incomplete, while diplomatic efforts had slowed rather than collapsed.”
In a separate development affecting global fuel markets, Russia announced a temporary ban on diesel exports to protect domestic fuel supplies.
The decision follows Ukrainian drone attacks on Russian refineries, which have contributed to fuel shortages and higher prices within the country.
Energy markets are expected to remain highly sensitive in the coming days, with investors closely watching military developments, diplomatic efforts and shipping activity in the Gulf region.
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