Oil prices waver as Gulf tensions clash with Russia peace hopes
Oil prices were mixed as US strikes on Iran and Israeli threats supported crude, while Putin's peace overtures pressured prices.
Oil markets ended Thursday's session on a divided note, with benchmark prices pulled in opposite directions by escalating tensions in the Middle East and a potential diplomatic thaw in the Russia-Ukraine conflict.
Brent crude futures settled 11 cents lower at $95.52 per barrel, while US West Texas Intermediate (WTI) crude rose 29 cents to close at $91.30. Earlier in the day, both contracts had touched six-week highs.
The latest surge in geopolitical risk followed US strikes on Iran, which Tehran's health minister said killed 18 people and wounded 108 others. Reports also indicated that three Iranian Army pilots were among the dead, and a wedding ceremony near the Strait of Hormuz was hit, causing additional casualties.
These attacks mark the most significant exchange of fire between Washington and Tehran since July, adding fresh urgency to concerns about supply disruptions from the region. Israeli Defence Minister Israel Katz further fueled these worries by reiterating threats to "cripple" Iran's military and civilian infrastructure, including its energy facilities, should Tehran retaliate.
However, capping the rally were comments from Russian President Vladimir Putin, who signaled openness to peace negotiations with Ukraine. Speaking at an economic forum, Putin suggested that several nations, including the US and China, were ready to support a settlement. Analysts noted that a potential de-escalation could ease concerns about Russian fuel supply disruptions.
Adding to the supply-side picture, preliminary data showed that only six commodity vessels transited the Strait of Hormuz on Wednesday, down from 11 the previous day and well below the 10-day average of around 13. Iran has also expanded its list of vessels it considers non-compliant, subjecting them to penalties if they attempt to cross the strait.
Meanwhile, Iraqi oil exports rose sharply to about 2.34 million barrels per day in August from roughly 1.35 million in July, with further increases expected in September as heavy discounts and Iranian approvals for Iraqi tankers attracted buyers.