Brent crude prices approached $96 per barrel on Thursday. Escalating tensions between the United States and Iran continued to impact the oil market. Brent settled at $95.52, down 11 cents. West Texas Intermediate (WTI) rose 29 cents to $91.30, according to Business Times. Both contracts reached six-week highs earlier in the trading session.
US-Iran Conflict Intensifies
The recent missile strikes between the U.S. and Iran have raised concerns over possible disruptions to oil supplies from the Middle East. U.S. Vice President JD Vance stated that Washington will not engage in peace talks with Iran until it stops attacks on commercial shipping in the Strait of Hormuz. The conflict has been ongoing for seven months, following U.S.-Israeli strikes that began in February. Reports indicate that 18 people were killed and over 100 injured in the U.S. strikes on Iran earlier this week. This marks the most significant escalation since July.
Market Reactions and Supply Dynamics
Analysts from ANZ noted that the oil market is in a delicate phase. Elevated inventories are helping to absorb initial supply shocks. However, they warned that the market may struggle to maintain balance as these buffers diminish. ING analysts pointed out that increased Iraqi oil exports, averaging 2.35 million barrels per day in August, could help stabilize supply. This is especially true if shipments through the Strait of Hormuz continue smoothly. Saudi Arabia's decision to keep its flagship Arab Light price unchanged for October loadings suggests easing supply constraints. However, fuel supplies remain tight.
The ongoing conflict is likely to keep oil prices elevated, particularly Brent and WTI. Concerns over supply disruptions persist. Investors are closely monitoring the situation, especially any developments in U.S.-Iran relations that could further influence market dynamics. Watch for further updates on the U.S. response to Iranian actions in the Strait of Hormuz and any potential shifts in diplomatic talks.
Based on reporting by: oilprice.com, businesstimes.com.sg