Iran-US Tensions Limit Oil Price Decline in Strait of Hormuz
Global oil prices dipped on Tuesday as tensions between the US and Iran persisted in the Strait of Hormuz. The price decline was limited, however, due to ongoing exchanges of fire between the two nations.
The Alliance Fairfax, a US-flagged vehicle carrier, exited the Gulf via the strait accompanied by the US military, according to Maersk. This development helped ease some of the worst-case supply disruption fears, said Tim Waterer, chief market analyst at KCM Trade.
Brent crude futures eased $1.38, or 1.2%, to $113.06 a barrel after settling up 5.8% on Monday. U.S. West Texas Intermediate crude fell $2.21, or 2.1%, to $104.26, following a 4.4% gain in the previous session.
Iran launched attacks on Monday to counter US attempts to take control of the Strait, which connects the Gulf to wider markets and typically carries oil and gas supply equal to about 20% of global demand every day. Several merchant ships in the Gulf reported explosions or fires on Monday, and an oil port in the United Arab Emirates was set ablaze by Iranian missiles.