Oil prices hovered near one-month highs on Thursday as investors weighed escalating military tensions in the Middle East against the prospect of tighter global crude supplies, keeping a geopolitical risk premium firmly embedded in the market.
Brent crude slipped 0.54% to US$84.49 a barrel, while U.S. West Texas Intermediate (WTI) traded around US$80 a barrel, easing slightly after a four-session rally but remaining close to their highest levels in a month.
The market has been supported by renewed concerns over the security of oil flows through the Strait of Hormuz, one of the world’s most strategically important energy chokepoints, after the United States intensified military operations against Iran.
U.S. forces carried out fresh airstrikes on Wednesday targeting Iranian missile storage facilities and launch sites near the strait, as Washington seeks to safeguard commercial shipping through the waterway. Reports that U.S. President Donald Trump is considering expanding military operations, including the possible seizure of Kharg Island, Iran’s main oil export terminal, have further heightened concerns over potential supply disruptions.
The Strait of Hormuz handles roughly a fifth of global seaborne oil shipments, making any threat to navigation through the channel a closely watched risk for energy markets.
The renewed tensions have reversed part of the sharp decline in oil prices seen during the second quarter, when an interim peace agreement had eased concerns over supply and pushed prices lower. Traders now fear that any escalation in the conflict could disrupt exports from one of the world’s key oil-producing regions, tightening an already uncertain supply outlook.
Adding to those concerns are continued Ukrainian attacks on Russian fuel production facilities and oil tankers, which have raised fresh questions about the resilience of global energy supplies as geopolitical conflicts increasingly intersect with commodity markets.
Despite Thursday’s modest decline, Brent has gained 6.21% over the past month and is trading 21.54% higher than a year ago, reflecting the market’s reassessment of geopolitical risks and their potential impact on oil supply.
Investors are expected to remain focused on developments in the Middle East in the coming days, with any further escalation around the Strait of Hormuz likely to influence price direction. Markets will also continue to monitor supply developments from major producers and any diplomatic efforts that could ease tensions and stabilise global energy markets.
