Oil prices fell, after gains achieved earlier, as markets awaited the repercussions of the military escalation between the United States and Iran and its potential repercussions on the movement of energy supplies through the Strait of Hormuz.
Brent crude futures fell by 11 cents, or 0.1%, to record $77.91 per barrel, while US West Texas Intermediate crude fell by 38 cents, or 0.5%, to $73.14 per barrel, after the two crude oils had reached their highest levels since June 22 during Wednesday’s trading.
The decline came despite the rise in prices in post-close trading, following the US military’s implementation of new strikes targeting Iran, followed by an Iranian response with attacks targeting Kuwait and Bahrain, which increased investors’ concerns about the security of oil supplies in the region.
Ole Hansen, an analyst at Saxo Bank, said that the markets are experiencing a state of extreme tension, noting that any development that reduces the chances of reaching an agreement that leads to calming the situation will lead to increased oil price fluctuations.
In this context, the Chairman of the Federal Reserve Board in New York indicated that the markets expect a decline in oil prices during the next six to twelve months, considering that these expectations seem logical in light of the current data.
Concerns increased about shipping traffic in the Strait of Hormuz, after insurance companies specializing in war risks recommended that some shipping companies suspend their trips through the Strait, while other companies began reviewing the terms of insurance documents following renewed Iranian attacks on ships.
For its part, Goldman Sachs Bank confirmed that the risks threatening oil flows in the Gulf remain high in the near term, expecting supplies to return to normal levels by the end of July, in the event that negotiations on the Iranian file resume, and exemptions related to Iranian oil exports continue, in addition to providing security guarantees to shipping companies.
The bank warned that faltering talks, an escalation in attacks on oil tankers, or the United States imposing additional restrictions on Iranian oil exports could lead to greater supply disruptions and a new rise in prices.
In turn, Anika Gupta, head of macroeconomic research at Wisdom Tree, expected that Brent crude oil would move within the next month within a range between $75 and $85 per barrel, with a slight tendency toward the rise, noting that the recovery of global supplies is still incomplete, while diplomatic efforts have not collapsed completely, despite their faltering.
In a separate development, Russia announced a temporary ban on diesel exports with the aim of supporting the local market, after Ukrainian drone attacks on a number of refineries led to a decline in supplies and an increase in fuel prices within the country.
