Oil prices experienced a slight decline on Thursday following a three-day surge, with Brent crude trading at $84.58 and West Texas Intermediate at $79.56 per barrel. This decrease comes after significant tensions escalated between the U.S. and Iran, raising concerns about the security of maritime routes critical for oil supply.

On Wednesday, the U.S. military conducted airstrikes targeting Iranian positions, aimed specifically at protecting commercial shipping in the Gulf region. These strikes were described by U.S. officials as a necessary measure to diminish Iran’s capacity to threaten maritime traffic.

In response, Iranian officials declared the conflict as an “existential war,” emphasizing that any ongoing hostilities could severely disrupt regional energy exports. The Strait of Hormuz, a vital channel through which about 20% of the world’s oil and natural gas transits, remains under potential threat due to these developments.

The recent military actions have heightened market anxieties, particularly as crude oil supplies are already under pressure. Data released by the U.S. Energy Information Administration showed a decrease in crude inventories by 1.7 million barrels during the past week. This decline coincided with a 1.5 million barrel drop in gasoline stockpiles, driven by high summer driving demand.

Experts from Jefferies predict that the present escalation could persist for several weeks, even if it stops short of a full-scale war. They noted that any prolonged disruptions in the Strait of Hormuz could maintain upward pressure on oil prices.

Despite the tensions, tanker traffic has reportedly continued, supported by U.S. military assistance. However, analysts warn that the ongoing conflict could threaten the routes that have historically allowed Gulf producers to maintain crude flows during periods of disruption.

In light of these developments, President Trump is reportedly contemplating options for expanding military operations, which may include increased airstrikes and possibly deploying ground forces to secure Iranian islands near the Strait.

This report is for informational purposes only and does not constitute financial advice.