Global crude oil prices retreated on Thursday after several sessions of sharp gains, as traders reassessed the likelihood of prolonged supply disruptions in the Middle East despite renewed military exchanges between the United States and Iran.
As of 5:40 p.m. WAT, Brent crude traded at $76.33 per barrel, down $1.69 or 2.17%, while West Texas Intermediate (WTI) fell to $72.01 per barrel, losing $1.51 or 2.05%.
The pullback followed last week's rally, which had been driven by escalating tensions around the Strait of Hormuz, a critical global oil shipping route. However, the latest price movement suggests investors are scaling back the geopolitical premium as markets weigh the resilience of oil supply against the ongoing conflict.
The decline came even as the United States and Iran continued exchanging strikes, with Washington indicating it is prepared for a prolonged military response to attacks on commercial shipping in the Strait of Hormuz.
The U.S. military confirmed another round of operations targeting Iranian military assets, saying the strikes were intended to reduce Tehran's ability to threaten commercial vessels navigating the strategic waterway. Iran, in turn, reported retaliatory attacks on U.S. military facilities in Bahrain, Kuwait and Qatar.
Market sentiment has nevertheless shifted as traders increasingly focus on the availability of oil supplies rather than the immediate geopolitical developments.
Recent shipments from the Gulf have eased earlier concerns over a severe supply shock, although tanker movements through the Strait of Hormuz remain below normal levels as shipowners continue to assess security risks following the renewed hostilities.
The evolving supply outlook has also prompted analysts to revise their market expectations. Goldman Sachs, which only last week projected a significant global oil surplus, has cautioned that renewed tensions in the Persian Gulf could delay the recovery of Middle Eastern crude production and weigh on export flows.
According to the bank, crude production in the region remains approximately 10.5 million barrels per day below pre-conflict levels, while oil flows through the Strait of Hormuz have fallen to around 70% of normal capacity, down from about 80% before the latest escalation.
Analysts said the market is balancing the risk of further supply disruptions against evidence that oil exports have continued despite the conflict, leading traders to unwind part of the sharp gains recorded earlier in the week.
While geopolitical developments remain a key driver of sentiment, the latest decline indicates that investors are increasingly pricing in expectations that global oil supplies may prove more resilient than initially feared.