Oil Prices Reversed as Tankers Navigate Conflict Zones

Oil prices slipped on Thursday as tankers continued to navigate through conflict zones in the Middle East, despite escalating tensions between the US and Iran. Brent futures fell by $0.79 or 0.9% to reach $87.30 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped by $0.76 or 0.9% to $83.70 a barrel.

The recent spike in oil prices was largely reversed as the situation persists, with multiple channels being explored for oil exports. According to IG market analyst Tony Sycamore, 'the longer this situation persists, the more these alternative routes and methods will erode Iran's leverage over the Strait of Hormuz.'

The Strait of Hormuz remains a critical oil shipping route, through which around 20% of global oil flows previously passed. However, it has been largely blocked since the start of the US-Iran war in February.

U.S.-Saudi strikes hit Iran-backed paramilitary forces in Iraq on Wednesday, marking the resumption of U.S. strikes in the Middle East. Saudi Arabia is seeking to build a coalition to protect Red Sea shipping from Houthi attacks.