Oil Prices Dip as Markets Focus on Supply Flows Amid Gulf Tensions

Oil prices have erased some of their previous gains as markets focus on supply flows through key choke points in the Gulf region, despite escalating attacks. Brent futures fell by $0.96 (1.06%) to $89.78 a barrel, while US West Texas Intermediate crude dropped $0.64 (0.76%) to $83.82.

Prices had surged earlier this week after US President Donald Trump threatened to hit Iran 'very hard' following an Iranian missile attack on a US base in Jordan. However, market analyst Lin Ye from Rystad Energy believes that the market has fully priced in this threat and is now considering the possibility of Trump backing down.

Despite ongoing tensions, oil supply continues to flow through the Gulf region. Rystad estimates that around 13 million barrels per day are still reaching markets, with alternative routes and methods being explored to bypass disruptions.