Oil Slips as Investors Look for Fresh Signals on Gulf Crude Supplies
NEW DELHI — Oil prices pulled back on Thursday, erasing some of the previous session’s gains, as investor attention shifted from escalating Gulf attacks to the continued flow of crude through alternative routes despite the near shutdown of the Strait of Hormuz.
Brent futures fell 96 cents, or 1.06 percent, to $89.78 a barrel, while US West Texas Intermediate crude dropped 64 cents, or 0.76 percent, to $83.82.
Prices had surged sharply on Wednesday after President Donald Trump threatened to hit Iran “very hard” following an Iranian missile attack on a US base in Jordan. The US and Saudi Arabia also carried out joint strikes on Iran-backed paramilitary forces in Iraq, marking the first time Riyadh had publicly joined US air operations.
However, prices are being capped as crude supply continues to move from the Gulf despite the blockade. Rystad Energy estimates about 13 million barrels per day of oil from the region is still reaching markets. Even after Houthi forces imposed a naval blockade on Saudi Arabia in the Red Sea, some cargoes, particularly on Chinese-connected tankers, have continued to flow.
Analysts noted a pattern of rapid price spikes followed by corrections. “The longer this situation persists, the more these alternative routes and methods will erode Iran’s leverage over the Strait of Hormuz,” said IG market analyst Tony Sycamore.
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