Brent and WTI fall as traders reassess Iran supply risks
Oil prices turned lower Thursday after a sharp rally triggered by fresh U.S. strikes on Iran and renewed fears of disruption around the Strait of Hormuz. The pullback showed traders were still wary of Middle East supply risks but not yet ready to extend Wednesday’s surge.
Highlights
- Brent crude futures fell 1.46%, while WTI crude futures dropped 1.41%.
- Prices had surged Wednesday after U.S. strikes on Iran.
- Hormuz shipping risks remain the key driver for crude.
The reversal followed a volatile session in which U.S. Central Command said new strikes on Iran were launched after attacks on commercial shipping in and around Hormuz, according to CNBC. President Donald Trump also said the ceasefire with Iran was over, adding to doubts over whether shipping flows through the region can normalize.
Prices reverse after Wednesday’s jump
Brent futures for September delivery fell 1.46% to $76.88 a barrel, while WTI futures for August delivery declined 1.41% to $72.48. The drop came after both contracts posted strong gains in the previous session. Brent settled 5.4% higher Wednesday, its biggest daily gain since May 4. WTI rose 4.4%, marking its strongest daily advance since June 1.
That pattern points to a market still caught between two forces: fear of supply disruption and caution over whether the latest escalation will actually reduce exports. When attacks near Hormuz intensify, crude often jumps first and sorts out the real supply impact later.
Hormuz risk stays central
The Strait of Hormuz remains the main concern because it is one of the world’s most important energy chokepoints. Even limited disruption can affect tanker insurance, freight costs, and short-term pricing, especially when shipowners face uncertainty over safe passage.
The latest U.S. strikes followed attacks on commercial vessels in the area. Traders are watching whether traffic through Hormuz slows again, whether Iran responds militarily, and whether Washington restores pressure on Iranian oil exports.
Energy markets remain exposed
The easing in prices does not mean the risk has disappeared. Oil is still trading with a geopolitical premium because a broader breakdown in U.S.-Iran relations could slow the recovery of Middle East supply flows.
For consumers and central banks, the key issue is whether the shock lasts. A short-lived spike may fade quickly. A sustained threat to Hormuz would be different, raising fuel costs, freight expenses, and inflation pressure across major economies.
We have previously highlighted that Hormuz crossings plunge as U.S. and Iran tensions rise.
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