Crude Oil Prices Remain Above $95 per Barrel Amid Supply Tensions in Hormuz
Oil prices fell on Thursday following a turbulent trading session, as investors reacted to recent US-Iran military actions and their implications for oil supply through the Strait of Hormuz. Brent crude was priced at $95.33 a barrel, down 30 cents or 0.31%, while West Texas Intermediate (WTI) traded at $90.88 a barrel, down 13 cents or 0.14%, around 7:30 am IST. The previous session saw both benchmarks experience significant fluctuations, with Brent reaching session highs not seen since July 24.
Shipping activity in the Strait of Hormuz has decreased significantly, with only four commodity vessels transiting the waterway on Wednesday, compared to a 10-day average of around 13, according to preliminary data from Kpler. The strait has faced disruptions since the onset of the US-Iran conflict, which began with joint US-Israeli strikes on Iranian targets in late February. Before the conflict, the strait was responsible for transporting about 20% of global oil and LNG consumption.
The Islamic Revolutionary Guard Corps indicated that recent US attacks would further limit traffic through the strait. Iran has also expanded its list of vessels deemed non-compliant, subjecting them to fines, confiscation, or detention if they attempt to navigate the waterway. Reports from Iran’s Revolutionary Guards stated that two oil tankers were disabled by sea mines while trying to transit the strait.
Trump says US ready for further attacks
The latest military escalation marks the seventh month of the US-Iran war, with the recent exchanges being the most intense since July. US forces targeted Iran’s southern coast, while Iran retaliated by firing on American bases in the region. President Donald Trump stated that the renewed US campaign against Iran would not last “too long” and confirmed that US forces had struck Iran’s radar and missile systems.
Trump emphasized the effectiveness of the US strikes, claiming, “We took out all of the new equipment that they tried to build along the Strait of Hormuz.” He added that the US is prepared to conduct further attacks at any time. Despite the ongoing restrictions on shipping traffic, the US reported that 17 million barrels of oil transited the Strait of Hormuz on Monday, marking the largest volume since the conflict began.
Global supply efforts continue
The disruptions in shipping have heightened concerns about global oil supplies, prompting countries to seek alternative sources and rely on their reserves to mitigate price increases. However, these reserves have been dwindling. The recent military actions have added further uncertainty to oil markets, which are already grappling with restricted movement through the Strait of Hormuz. Prices remained volatile during Wednesday’s trading, with Brent and WTI experiencing frequent shifts between gains and losses before Brent ultimately closed higher. On Thursday, both benchmarks declined as investors weighed the potential for additional military strikes and further supply disruptions from the Middle East.
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