Oil prices stayed higher on Thursday, although gains eased after the previous session’s sharp rally.
Investors continued to assess the risk of supply disruptions after renewed U.S.-Iran tensions and fresh threats to shipping through the Strait of Hormuz.
WTI and Brent Crude Move Higher
At 01:45 ET, Crude Oil WTI Futures rose 0.57% to $73.94 a barrel.
Brent Oil Futures gained 0.64% to $78.52 a barrel.
Both contracts remained well above levels seen earlier in the week, even after pulling back from Wednesday’s highs.
Oil Rally Cools After Sharp Surge
Brent and WTI jumped more than 8% in the previous session.
The rally came after President Donald Trump said the U.S.-Iran ceasefire was effectively over. He also ordered fresh strikes on Iranian targets and warned of more military action.
In response, Tehran threatened shipping through the Strait of Hormuz, increasing fears of disruption in one of the world’s most important oil routes.
Renewed Conflict Threatens Gulf Oil Supply
No major disruption to Gulf crude exports has been reported so far.
However, traders remain cautious after several commercial vessels were attacked near the Strait of Hormuz in recent days. Some tanker operators have delayed or changed routes through the strategic waterway.
The U.S.-led Joint Maritime Information Center continues to classify the threat to commercial shipping as severe.
Shipping Risks Rise in the Strait of Hormuz
The Joint Maritime Information Center raised the threat level for shipping in the Strait of Hormuz to “severe.”
The International Maritime Organization also urged vessels to use extreme caution when passing through the route.
Washington said its latest strikes on Iran were aimed at reducing Tehran’s ability to threaten commercial shipping. Iran, meanwhile, warned that it would retaliate against U.S. military assets and repeated its threats over navigation through the Strait.
Gulf Export Recovery Faces New Uncertainty
The renewed conflict has raised fresh doubts over the recovery in Gulf oil exports.
Tanker traffic through the Strait of Hormuz had been improving after last month’s ceasefire. But traders now fear that further attacks on commercial vessels could slow that recovery.
Any major disruption could once again threaten crude flows from the Persian Gulf.
Analysts Warn of Rising Geopolitical Risk Premium
ANZ said the latest escalation has rebuilt a geopolitical risk premium into oil prices.
The bank warned that a collapse of the temporary U.S.-Iran understanding could interrupt the recovery in Gulf crude exports.
ANZ also noted that tanker traffic had been improving before this week’s attacks, but renewed security threats now risk slowing that normalization.
Fuel Markets Show Signs of Tightness
ANZ also pointed to tighter refined fuel markets.
Russia extended restrictions on diesel exports through July. At the same time, U.S. government data showed large draws in distillate and gasoline inventories, alongside record fuel exports.
Although commercial crude inventories increased last week, tighter fuel stockpiles showed that downstream demand remains strong.
Markets Watch Iran Conflict and Oil Supply Risks
Investors are now watching for further developments in the U.S.-Iran conflict.
Markets will also focus on shipping conditions through the Strait of Hormuz and any signs of fresh disruption to Middle East crude exports.
