Oil Prices Slip as Tensions Persist in Middle East

Crude oil prices dipped slightly on Thursday despite ongoing tensions in the Middle East. The renewed strikes between the US and Iran, as well as a drone attack on a tanker in an Egyptian port, did little to impact oil flows. In fact, reports suggest that oil tankers are still making their way through the Bab el-Mandeb Strait.

Brent crude was trading at $89.46 per barrel, down about 1% from Wednesday's close. West Texas Intermediate followed suit, dropping to $83.54 per barrel. This decline comes as the US Central Command announced renewed strikes on targets in Iran on Wednesday, saying 'The strikes are a powerful response to yesterday's attempted Iranian attacks on U.S. forces based in the Middle East.'

However, analysts point out that while overall volumes are reduced, oil continues to leak out of the region through multiple channels. Tony Sycamore from IG Group noted that 'the longer this situation persists, the more these alternative routes and methods will erode Iran's leverage over the Strait of Hormuz.'

ING commodity strategists also weighed in on the matter, stating that the risk of prolonged supply disruptions grows, especially for middle distillates. They point out that crack spreads are still breaking records.