Oil prices fell today but were up slightly in the week as efforts to halt the Iran war remained at an impasse, with Tehran still blocking the Strait of Hormuz and the US Navy blocking exports of Iranian crude.
Brent crude futures for July were down $2.23, or 0.5%, at $108.17 a barrel this evening, while West Texas Intermediate futures dropped $3.16, or 3%, to $101.91.
Brent's June contract hit $126.41 a barrel yesterday, marking the highest level since March 2022, before ending the session down.
"Thursday's sharp reversal underscores a market that is taking the stairs up but risks the elevator down on any sudden easing headline, making conditions exceptionally challenging for traders," said Ole Hansen at Saxo Bank.
Oil prices have been on the rise since the US and Israel attacked Iran at the end of February, resulting in the closure of the Strait of Hormuz and disruption of shipments of about a fifth of the world’s oil and liquefied natural gas supply.
"The path of least resistance for crude oil prices remains upward as long as flows through the strait are restricted," said UBS analyst Giovanni Staunovo, adding that oil inventories are falling quickly because of an undersupplied market.
A ceasefire has been in place since April 8, but Iranian Foreign Ministry spokesman Esmaeil Baghaei said yesterday it was unreasonable to expect quick results from US talks, the official IRNA news agency reported.
UAE presidential adviser Anwar Gargash said in a post on X today that no unilateral Iranian arrangements can be trusted or relied upon regarding freedom of navigation through the Strait of Hormuz after its "treacherous aggression" against its neighbours.
A senior official of Iran's Revolutionary Guards had threatened yesterday "long and painful strikes" on US positions if Washington renewed attacks on Iran, pushing oil prices to intraday peaks before retreating.
US President Donald Trump was scheduled to receive a briefing yesterday on plans for a series of fresh military strikes on Iran to compel it to negotiate an end to the conflict, a US official told Reuters.
(Reporting by Stephanie Kelly in London and Helen Clark in Melbourne
