Oil Prices Decline as Market Looks Past Geopolitical Tensions

Oil prices declined on Thursday as investors focused on supply flows through key chokepoints in the region, despite escalating attacks in the Gulf. Brent futures fell by $0.96 or 1.06 percent to $89.78 a barrel as of 0418 GMT, while US West Texas Intermediate (WTI) crude dropped by $0.64 or 0.76 percent to $83.82 a barrel.

The price increase in the previous session was one of the sharpest spikes during the Iran war, with Brent settling up 7.91 percent and WTI up 6.56 percent. This surge was triggered by US President Donald Trump's threat on Wednesday to hit Iran 'very hard' after an Iranian missile attack on a US base in Jordan.

Rystad Energy's vice president of commodity markets, oil, Lin Ye said the market has fully priced in Trump's rhetoric and is considering the possibility that he may not follow through. According to Ye, geopolitical headlines are triggering rapid price spikes, but those gains often prove short-lived as actual supply flows and diplomatic efforts determine how long upward price moves persist.