Oil falls as investors weigh chance of US intervention in Iran-Israel conflict
BEIJING: Oil prices slipped on Thursday as investors hesitated to take new positions after US President Donald Trump gave mixed signals on the country's potential involvement in the ongoing Israel-Iran conflict.
Brent crude futures fell 37 cents, or 0.48 per cent, to US$76.33 a barrel by 0110 GMT after gaining 0.3 per cent in the previous session marked by high volatility, with prices falling as much as 2.7 per cent.
US West Texas Intermediate crude for July fell 28 cents, or 0.37 per cent to US$74.86 a barrel, after settling up 0.4 per cent in the previous despite dropping by as much as 2.4 per cent.
The July contract expires on Friday and the more active August contract was down 21 cents, or 0.29 per cent, to US$73.29 a barrel.
There is still a "healthy risk premium baked into the price as traders await to see whether the next stage of the Israel-Iran conflict is a US strike or peace talks", Tony Sycamore, market analyst at IG, said in a note.
The former could lead prices to rise by US$5 while peace talks could lead to a drop of around the same magnitude, Sycamore said.
Trump on Wednesday told reporters that he may or may not decide for the US to join Israel in its missile attacks on Iran. The conflict stretched into its seventh day on Thursday.
Direct US involvement would widen the conflict, putting energy infrastructure in the region at higher risk of attack, analysts say.
Iran is OPEC's third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil. But more crucially, about 19 million bpd of oil and oil products move through the key Strait of Hormuz waterway and there is widespread concern the fighting could disrupt trade flows there.
The US Federal Reserve kept interest rates steady on Wednesday but pencilled in two rate cuts by the end of the year. Chair Jerome Powell however cautioned the rate cuts would be "data-dependent" and that more consumer inflation is expected from President Trump's planned import tariffs.
Lower interest rates would stimulate the economy, and as a result demand for oil, but that could exacerbate inflation.
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New Straits Times
17 minutes ago
- New Straits Times
Iran, Israel trade deadly strikes as Trump hesitates US involvement
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But while diplomatic efforts continue, some residents of Tehran, a city of 10 million people, on Wednesday jammed highways out of the city. Arezou, a 31-year-old Tehran resident, told Reuters by phone that she had made it to the nearby resort town of Lavasan. "My friend's house in Tehran was attacked and her brother was injured. They are civilians," she said. "Why are we paying the price for the regime's decision to pursue a nuclear programme?" A source familiar with internal discussions said Trump and his team were considering options that included joining Israel in strikes against Iranian nuclear installations. But the prospect of a US strike against Iran has exposed divisions in the coalition of supporters that brought Trump to power, with some of his base urging him not to get the country involved in a new Middle East war. Senior US Senate Democrats urged Trump to prioritise diplomacy and seek a binding agreement to prevent Iran from attaining nuclear weapons, while expressing concern about his administration's approach. "We are alarmed by the Trump administration's failure to provide answers to fundamental questions. By law, the president must consult Congress and seek authorization if he is considering taking the country to war," they said in a statement. "He owes Congress and the American people a strategy for US engagement in the region." DRONE ATTACKS On Thursday morning, a missile warning was issued by Israel's military and explosions were heard over Tel Aviv and Jerusalem. The Israeli military said several civilian areas, including a hospital, were hit by Iranian missile strikes. In Iran, the ISNA news agency reported that an area near the heavy water facility of the Khondab nuclear facility was targeted by Israel. Earlier, air defences were activated in Tehran, intercepting drones on the outskirts of the capital, the semi-official SNN news agency reported. Iranian news agencies also reported it had arrested 18 "enemy agents" who were building drones for Israeli attacks in the northeastern city of Mashhad. Israeli Prime Minister Benjamin Netanyahu, in a video released by his office on Wednesday, said Israel was "progressing step by step" towards eliminating threats posed by Iran's nuclear sites and ballistic missile arsenal. "We are hitting the nuclear sites, the missiles, the headquarters, the symbols of the regime," Netanyahu said. Israel, which is not a party to the international Non-Proliferation Treaty, is the only country in the Middle East believed to have nuclear weapons. Israel does not deny or confirm that. Netanyahu also thanked Trump, "a great friend of the state of Israel," for standing by its side in the conflict, saying the two were in continuous contact. Trump has veered from proposing a swift diplomatic end to the war to suggesting the United States might join it. In social media posts on Tuesday, he mused about killing Khamenei. Russian President Vladimir Putin, asked what his reaction would be if Israel did kill Iran's Supreme Leader with the assistance of the United States, said on Thursday: "I do not even want to discuss this possibility. I do not want to." Putin said all sides should look for ways to end hostilities in a way that ensured both Iran's right to peaceful nuclear power and Israel's right to the unconditional security of the Jewish state. Since Friday, Iran has fired around 400 missiles at Israel, some 40 of which have pierced air defences, killing 24 people, all of them civilians, according to Israeli authorities. The Iranian missile salvoes mark the first time in decades of shadow war and proxy conflict that a significant number of projectiles fired from Iran have penetrated defences, killing Israelis in their homes. Iran has reported at least 224 deaths in Israeli attacks, mostly civilians, but has not updated that toll for days.
New Straits Times
32 minutes ago
- New Straits Times
Bursa Malaysia dips midday amid profit-taking, US-Iran tensions
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New Straits Times
32 minutes ago
- New Straits Times
US moves aircraft, ships and restricts access to Qatar base as Iran-Israel tensions escalate
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