Key facts
- Oil prices experienced mixed movements, with Brent crude falling and WTI rising.
- Renewed U.S. strikes on Iran and Israeli threats heightened concerns about Middle East oil supply disruptions.
- Russian President Vladimir Putin signaled openness to peace negotiations, which pressured oil prices.
- Middle Eastern oil benchmarks surpassed $100 per barrel amid heightened tensions in the Strait of Hormuz.
- Rising global bond yields, reaching their highest levels since 2008, are contributing to lower oil demand expectations.
Oil prices saw mixed trading on Thursday, with Brent crude futures declining and U.S. West Texas Intermediate (WTI) futures increasing. Renewed U.S. strikes on Iran and threats from Israel revived concerns about potential supply disruptions in the Middle East, pushing regional oil benchmarks past $100 per barrel amid heightened tensions in the Strait of Hormuz.
Two Very Large Crude Carriers (VLCCs) carrying Saudi oil were struck by projectiles while exiting the Strait of Hormuz, raising further fears for Gulf oil exports. U.S. President Trump indicated a potential for sustained conflict, threatening further strikes after an attack on Larak Island.
Concurrently, global bond yields have reached their highest levels since 2008, driven by inflation fears and expectations of potential Federal Reserve rate hikes. This environment is creating demand risks for oil, as increased borrowing costs impact various economic sectors. The market is pricing in a significant chance of a Federal Reserve rate hike this month, with new Fed chairman Kevin Walsh vowing to tame U.S. inflation.