Oil prices fall amid escalating Middle East tensions, strait of Hormuz remains open. Image: ZAWYA.
(The Post News)– Oil prices dropped 1% after hitting a five-month high as investors weighed the impact of US airstrikes on Iran’s nuclear sites on oil shipments through the Strait of Hormuz. Brent crude futures fell 70 cents to $76.31 per barrel, while US West Texas Intermediate crude decreased 76 cents to $73.09. The prices had earlier surged to $81.40 and $78.40, respectively, amid escalating Middle East tensions.
US President Donald Trump claimed the airstrikes destroyed Iran’s main nuclear facilities, and Israel launched additional strikes on Tehran and the Fordow nuclear facility. At least two supertankers altered their course near the Strait of Hormuz, where about 20% of the world’s oil supply passes through. Analysts believe a total shutdown is unlikely, but asymmetric attacks on ships or terminals remain possible.
Iran condemned the US attack, labelling Trump a “gambler” for partnering with Israel, and warned of expanded military targets. Trump urged lower oil prices, encouraging the US Department of Energy to “drill, baby, drill”. Investors are assessing the geopolitical risk premium’s impact, and HSBC expects Brent prices to spike above $80 per barrel if the Strait of Hormuz closure becomes more probable. International oil majors, including BP, TotalEnergies, and Eni, evacuated some staff members working in Iraq’s oilfields.
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