Oil prices edged lower on Thursday 16 July as market participants assessed growing tensions between the US and Iran, and the potential impact on oil shipments through the Strait of Hormuz.
By 08:08 GMT, Brent crude futures had dropped by $0.58, or 0.68%, to $84.37 per barrel (bbl), reported Reuters.
Meanwhile, US West Texas Intermediate (WTI) futures had fallen by $0.18, or 0.23%, to $79.42/bbl.
Both benchmarks remain near their highest levels in a month after Brent gained nearly $1 earlier in the trading session.
The recent price movement follows renewed hostilities after the US military struck Iranian coastal defences and missile sites on Wednesday, having reinstated a naval blockade of Iranian ports.
Tehran responded by threatening to disrupt further regional energy exports, characterising the situation as an "existential war" with the US.
The breakdown of a fragile truce reached in June has reignited concerns over a broader conflict and the security of energy supplies passing through the Strait of Hormuz.
Before the outbreak of hostilities, around one fifth of the world’s daily oil and liquefied natural gas (LNG) shipments transited this narrow waterway.
Shipping activity in the region has slowed since the US blockade resumed, reported Reuters.
According to Kpler, nine vessels transited the strait on Wednesday, mostly on Iranian routes, compared to 13 the previous day.
Shipping data indicated no very large crude carrier (VLCC) or LNG tankers passed visibly through the strait on Wednesday.
The US Central Command reported it had disabled an unladen oil tanker, the Curacao-flagged VLCC Belma, after it failed to heed warnings and attempted to move towards Iran’s Kharg Island.
Since Tuesday, the US military has redirected two ships and disabled another in the area.
Five empty vessels, including oil tankers and dry bulk carriers, entered the Gulf on Wednesday, while four departing ships carried liquefied petroleum gas, coal, fertiliser and fuel oil.
An Iranian official called the Strait of Hormuz an inviolable “red line” and warned of reprisals if US President Donald Trump ordered attacks on Iranian infrastructure, saying it would respond against infrastructure throughout the Gulf region.
In other developments, Ukraine's Security Service announced it had used naval drones with the Ukrainian Navy to strike two Russian “shadow fleet” tankers in the Black Sea.
