Middle East Tensions Erode Oil Prices as Tanker Traffic Flows

Oil prices retreated on Thursday as tankers continued to navigate through conflict zones in the Middle East, despite escalating tensions between the US and Iran.

The Brent futures price fell by $1.29 (HK$10.06) or 1.42 percent, to $89.45 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped 56 cents, or 0.66 percent, to $83.90 a barrel.

This decline comes after oil prices spiked sharply on Tuesday, rising by 7.91 percent for Brent and 6.56 percent for WTI, in one of the largest jumps since the Iran war began.

According to preliminary shipping data, thirty-nine commodity ships passed through the Bab el-Mandeb strait into the Red Sea on Tuesday, the highest number since July 19, with only a few transiting through the Strait of Hormuz.

IG market analyst Tony Sycamore noted that while overall volumes are reduced, oil is still leaking out of the region through multiple channels, and alternative routes and methods are being explored.