Oil declines as tankers continue to transit conflict zones in the Middle East - Sarmad

Oil prices gave up some gains on Thursday as oil tankers continued to depart the Middle East region despite escalating tensions there and the spillover of the conflict between the United States and Iran beyond its main fronts.

Brent crude futures fell $1.29, or 1.42 percent, to $89.45 a barrel by 0110 GMT. U.S. West Texas Intermediate crude dropped 56 cents, or 0.66 percent, to $83.90 a barrel.

Brent rose 7.91 percent at yesterday’s settlement, while West Texas Intermediate gained 6.56 percent in one of the strongest rallies during the Iran war, reversing a 5 percent drop on Tuesday after a temporary halt in combat operations in the U.S.-Iran war.

Preliminary data showed that 39 bulk cargo ships transited the Bab el-Mandeb strait into the Red Sea on Tuesday, the highest number since July 19, while only a few ships crossed the Strait of Hormuz.

Tony Sycamore, market analyst at IG, said in a note, “Despite lower overall volumes, oil is still leaving the region via multiple routes, and additional alternative solutions are being explored. The longer this situation persists, the more these alternative routes and methods will undermine Iran’s influence over the Strait of Hormuz.”